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Develop a three-week moving average for this time series.Compute MSE and a forecast for week 7. Round your answers to twodecimal places.

Week TimeSeries
Value		 Forecast
1 18
2 15
3 16
4 13 _______
5 17 _______
6 16 _______


MSE:

The forecast for week 7:

Use = 0.2 to compute the exponential smoothing valuesfor the time series. Compute MSE and a forecast for week 7. Roundyour answers to two decimal places.

Week TimeSeries
Value		 Forecast
1 18
2 15 _______
3 16 _______
4 13 _______
5 17 _______
6 16 _______


MSE:

The forecast for week 7:

Compare the three-week moving average forecast with theexponential smoothing forecast using = 0.2. Whichappears to provide the better forecast based on MSE?



Explain.

The input in the box below will not be graded, but may be reviewedand considered by your instructor.

Use trial and error to find a value of the exponential smoothingcoefficient that results in a smaller MSE than what youcalculated for a= 0.2. Find a value of for the smallestMSE. Round your answer to three decimal places.

a =

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Jean Keeling
Jean KeelingLv2
28 Sep 2019

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Part 3 of 8 - Part 3 The next three questions are based on thefollowing information. Sam has a cleaning service. To betterallocate his resources, he would like to forecast his weekly ordersbased on the order number he received in the past 13 weeks as shownin the following table. Week Demand Week 1 11 Week 2 14 Week 3 16Week 4 10 Week 5 15 Week 6 17 Week 7 11 Week 8 14 Week 9 17 Week 1012 Week 11 14 Week 12 16 Week 13 15 Question 1 of 3 5.0 PointsUsing a three week moving average, Sam's forecast for his Week 14order number is . (Please round to two decimal points and includeno units.) Mark for Review What's This? Question 2 of 3 5.0 PointsUsing a three week weighted moving average with weights 3, 2, and 1given to the most recent, second most recent, and third most recentweek, respectively, Sam's forecast for his Week 14 order number is. (Please round to two decimal points and include no units.) Markfor Review What's This? Question 3 of 3 5.0 Points If the MAD formoving average is 4.17 and the MAD for weighted moving average is2.38, then which forecast is more accurate? A.Moving averageB.Weighted moving average C.The same D.Not enough information toevaluate

Buckshot Electronics is a chain of electronics superstores that is located throughout California. They have 15 locations concentrated primarily in heavily populated areas. They sell thousands of products made by hundreds of different manufacturers. Buckshot sells everything from phones, cameras, DVD players, and video game consoles to large items like televisions.

Sony is one of their larger suppliers. They offer products in nearly every category Buckshot offers to its customers. In fact, Sony sells multiple cell phone models through Buckshot. One such model is the Q9900.

One of Buckshot's San Francisco stores is forecasted to sell about 7800 units of the Q9900 in the coming year. This forecasted demand is about average in terms of Buckshot's 15 other California locations. Presently they order 900 units of the Q9900 every 6 weeks.

Each store fills weekly orders through its Sony Distributor for items like TV's, DVD Players, cameras, and of course, cell phones, in addition to many other items. Orders for cell phones must be made in increments of 100 units. The distributor takes only one order per week, but Buckshot is not obligated to order every item every week. That order is then shipped 2 days later to that individual Buckshot Electronics location by truck.

Buckshot's Central Procurement is looking to save money by investigating order sizes and subsequent order frequency. You are being asked to create a recommendation for order size and time between orders for the Q9900 based on the numbers for this San Francisco location. Answer the questions that follow in order to create a detailed report for your supervisor.

Below are some the key figures important in your analysis:

Q9900 Wholesale Price $ 325.00

Q9900 Retail Price $ 399.00

Annual Per Unit Holding Costs are estimated at 35% of the wholesale cost of the Q9900.

Costs associated with each order include: Order Placement Fees (Documentation, Network Support) $ 250.00 Delivery

(Fuel, Driver, Truck, etc.) $ 350.00

Packaging $ 150.00

Receiving (Inspection, Documentation, etc.) $ 150.00

Labor ( 5 hours @ $10.00/hr) Stocking, Misc. $ 50.00

Questions:

Using Present Lot Size (Q = 900)

According to the information supplied, what is the present annual inventory cost? (In other words, using their present lot size what is the annual inventory cost?) Also, separately identify, the annual cost of purchasing the inventory, the annual holding cost (AHC) and annual ordering cost (AOC).

7. What is the annual cost to purchase the items? (Q = 900) (Choose the closest answer)

8. What is the annual ordering cost, AOC? (Q = 900) (Choose the closest answer)

9. What is the annual holding cost, AHC? (Q = 900) (Choose the closest answer)

10. What is the total annual cost of inventory, TC? (Q = 900) (Choose the closest answer)

Using the Economic Order Quantity (Q=EOQ)

11. What is the EOQ? (Choose the closest answer)

12. Using the calculated EOQ, how often will orders be placed? All answers are in weeks. (Choose the closest answer)

According to the information supplied, what would be the annual inventory cost if they used the calculated EOQ? Also, separately identify the annual holding cost (AHC) and annual ordering cost (AOC).

13. Using the calculated EOQ, what is the annual holding cost (AHC)? (Choose the closest answer)

14. Using the calculated EOQ, what is the annual ordering cost (AOC)? (Choose the closest answer)

15. What is the total annual cost of inventory, TC? (Q = EOQ) (Choose the closest answer)

16. If they could order the EOQ instead of 900, how much would this one store stand to save annually?

17. Why is this not possible for this company to use the calculated EOQ as their order size?

PROPER ORDER SIZE The store must decide how often they want to order. • Remember, the weekly demand is 150 units. • If they order weekly, the store will require at minimum 200 units per week. • If they order every other week, the store will require at minimum 300 units to get to the next ordering period. (150 units per week, 2 weeks.)

18. If they order every 3 weeks, what will be the minimum required order size? Remember, you must abide by the Sony Distributor’s ordering rules.

19. Assume they sell exactly 150 units each week during the three-week period. Based on the appropriate answer to the previous question, how many extra units will they have left at the end of each three-week period?

20. Based on the ordering scenario where orders are placed every 3 weeks, over a 52-week year, how much extra inventory will this store have accumulated? (Take your answer to #19, divide by 3, and then multiply by 52)

21. If they instead order every 2 weeks what will be the minimum required order size? Remember, you must abide by the Sony Distributor’s ordering rules.

22. Assume they sell exactly 150 units per week. Based on the appropriate answer to the previous question, how many extra units will they have left at the end of the 2-week period?

23. Based on the weekly ordering scenario, over a 52-week year, how much extra inventory will this store have accumulated? (Take your answer to #22, divide by 2, and then multiply by 52)

24. Realistically, which of the following options is most attractive? An attractive option is one where the order size is close or equal to the EOQ, abides by the distributor’s ordering rules, and minimizes the amount of unnecessary inventory. (We will call this Q*)

According to the appropriate recommendation you provided in #24, what would be the Total Annual Inventory cost? Also, separately identify, the annual holding cost (AHC) and annual ordering cost (AOC).

25. Using the Q*, what is the annual holding cost (AHC)? (Choose the closest answer)

26. Using the Q*, what is the annual ordering cost (AOC)? (Choose the closest answer)

27. What is the total annual cost of inventory, TC? (Q = Q*) (Choose the closest answer)

28. The total annual savings for this one store using our recommendation (Q*) versus the present lot size of 900, would be:

TOTAL SAVINGS ALL STORES

29. Without store-by-store information it is difficult to say how much this would save the corporation. Nonetheless, using only the numbers for this store it can be said that if the numbers for the other 14 stores are similar there is a potential to save a total of about…Remember, there are 15 stores, total!

Thanks so much in advance! Much appreicated

The purpose of this case study is to help you integrate the managerial accounting concepts that were covered in class and apply them to a real-world business setting. Business Description You will assume the role of an entrepreneur starting a small company. Your company will produce and sell gourmet cupcakes through a storefront in a location of your choice. Your business is scheduled to launch on January 1, 2018. Cost information: 1 Cost of goods sold: a. Ingredients are .30 per cupcake b. Boxes and Cupcake Cups are .05 per cupcake 2 Equipment that will be required to be acquired at the start of business includes ovens, racks, display case, counter, cash register, and other baking equipment and will cost $140,000. The equipment is expected to last 10 years without salvage value. Straight-line method of depreciation should be used. 3 On average one person can make, bake, and decorate 24 cupcakes per hour. Bakers are paid $15.00 per hour. 4 Sales personnel are required for 56 hours per week and are paid $10.00 per hour. 5 Monthly rent, which includes utilities, is $1,500. 6 Business insurance is purchased at a cost of $1,000 per year. 7 Advertising costs are expected to be $6,000 per year.   Requirements: Using separate tabs in a spreadsheet, provide your answers for the following. 1 Name your company (5 points) 2 What and how much are the variable costs? Present each item in cost per cupcake basis (5 points). 3 What and how much are the fixed costs? Present each item in total cost per year (5 points). 4 Write out the annual cost formula in Y = a + bX format (5 points). 5 Develop a price using a target price (what do you think a customer will pay for one of your cupcakes? What are other companies charging for gourmet cupcakes?) Provide support for your target price (10 points). 6 Develop a price using cost-based pricing assuming that you expect to sell 24,000 cupcakes the first year and would like to have a 20% profit (10 points). 7 Using the price you calculated using cost based pricing in #6, calculate contribution margin per cupcake and contribution margin ratio (5 points). 8 Based on the price you calculated in #6, calculate how many cupcakes need to be sold in order to break-even. Calculate how much sales in dollars are needed to break-even (10 points). 9 Prepare a cost/volume/profit chart (15 points). 10 Prepare the company’s forecasted functional income statement for the year ended on 12/31/2018 based on the sale of 36,000 cupcakes (10 points). 11 Based on the sale of 36,000 cupcakes during the first year of business, calculate the margin of safety and the operating leverage for the business. What do these figures tell you about how risky the business is? (15 points) 12 If sales could increase by 10% (to 39,600 cupcakes), by how much in dollars would net operating income increase? By what percentage would net operating income increase? Use the formula for leverage to calculate (5 points). 13 Prepare a contribution format income statement assuming sales of 39,600 cupcakes (10 points). 14 Calculate how many cupcakes need to be sold in order to make a $50,000 target profit for the year (5 points). 15 Calculate the total amount of cash that will be needed at the start of the business in order to buy all necessary equipment and machines and cover the first three months of fixed expenses. This amount will be your initial investment in the business. Note that the equipment will be paid in full on the first day of business. Other expenses will be paid on a monthly basis (10 points). 16 Prepare a cash budget for the company’s first year of operations based on the sales calculated in item 14. Assume all sales are cash sales and that all costs and expenses are paid in cash. You decide to maintain a minimum cash balance of $5,000 (15 points). 17 After your thorough analyses of costs, sales, and profitability of your cupcake business throughout this project, what is your overall impression of the future potential of the business? Provide a short assessment (10 points).

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