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Concept explainers
Introduction:
HR café was started in 1971 with one pub in London and expanded to 129 restaurants in more than 40 countries. This raised the necessity for an improved
Each sales entry represents one customer and the headquarters database receives every sales data. The forecast is made on the basis of data, the guest counts, dinner sales, retail sales, and concert sales at each café. The firm also adopts information of the past year for the particular day and the information from the tourist board for the forthcoming program.
A bonus is given to managers who exceed their targets. The 3-year weighted average technique is adopted to estimate sales. They use multiple regressions to measure the impact of the demand of one item over others. The placements of food items are also taken as a measure to forecast demand.
To determine: To find the expected guest count when advertising is $65,000.
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Chapter 4 Solutions
EBK PRINCIPLES OF OPERATIONS MANAGEMENT
- The Baker Company wants to develop a budget to predict how overhead costs vary with activity levels. Management is trying to decide whether direct labor hours (DLH) or units produced is the better measure of activity for the firm. Monthly data for the preceding 24 months appear in the file P13_40.xlsx. Use regression analysis to determine which measure, DLH or Units (or both), should be used for the budget. How would the regression equation be used to obtain the budget for the firms overhead costs?arrow_forwardThe owner of a restaurant in Bloomington, Indiana, has recorded sales data for the past 19 years. He has also recorded data on potentially relevant variables. The data are listed in the file P13_17.xlsx. a. Estimate a simple regression equation involving annual sales (the dependent variable) and the size of the population residing within 10 miles of the restaurant (the explanatory variable). Interpret R-square for this regression. b. Add another explanatory variableannual advertising expendituresto the regression equation in part a. Estimate and interpret this expanded equation. How does the R-square value for this multiple regression equation compare to that of the simple regression equation estimated in part a? Explain any difference between the two R-square values. How can you use the adjusted R-squares for a comparison of the two equations? c. Add one more explanatory variable to the multiple regression equation estimated in part b. In particular, estimate and interpret the coefficients of a multiple regression equation that includes the previous years advertising expenditure. How does the inclusion of this third explanatory variable affect the R-square, compared to the corresponding values for the equation of part b? Explain any changes in this value. What does the adjusted R-square for the new equation tell you?arrow_forwardThe file P13_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars) through credit unions. a. Use these data to forecast consumer revolving credit through credit unions for the next 12 months. Do it in two ways. First, fit an exponential trend to the series. Second, use Holts method with optimized smoothing constants. b. Which of these two methods appears to provide the best forecasts? Answer by comparing their MAPE values.arrow_forward
- Do the sales prices of houses in a given community vary systematically with their sizes (as measured in square feet)? Answer this question by estimating a simple regression equation where the sales price of the house is the dependent variable, and the size of the house is the explanatory variable. Use the sample data given in P13_06.xlsx. Interpret your estimated equation, the associated R-square value, and the associated standard error of estimate.arrow_forwardA reputable FMCG company is holding its Annual Sales Conference on January 30th 2021 for its New Year sales plan. The company is interested in launching new product beside its existing product lines. The new product will be novel in the history of the company. 1. Discuss the techniques of forecasting that will be used by the company for its existing and new products.2. Explain specific type and reason for using those techniques. Also identify the limitations of these techniques. Answer should be explaining about new product of FMCG company in details (do not expalin genral it should be specific)arrow_forwardGiven the data below, what is the simple linear regression model that can be used to predict sales in future weeks? Week 1 2 3 4 5 Sales 150 157 162 166 177arrow_forward
- A reputable FMCG company is holding its Annual Sales Conference on January 30th 2021 for its New Year sales plan. The company is interested in launching new product beside its existing product lines. The new product will be novel in the history of the company. 1. Discuss the techniques of forecasting that will be used by the company for its existing and new products.2. Explain specific type and reason for using those techniques. Also identify the limitations of these techniques.arrow_forwardConsider the monthly sales data of a company for last year as well as first six-month data for current year. Use a three- quarter weighted moving average, Forecast the sales of company for 3rd Quarter of current year. Use Weights of 4/7, 2/7 and 1/7, giving more weight to more recent data. Note, the 1ist quarter is Jan, Feb and March, 2nd quarter is Apr, May, June, 3rd quarter is July, Aug and Sept, and 4th quarter is Oct, Nov and Dec. Month Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Last Yr 100 125 135 175 185 200 150 140 130 200 225 250 Current Yr 125 135 135 190 200 190arrow_forwardHow would you choose the appropriate number of factors to use in a forecasting model and how would you build a factor augmented VAR.arrow_forward
- guide with reasons for the company to use appropriate forecasting models.arrow_forwardThere are two general methods to forecasting:Even, what is their meaning?arrow_forwardK 2. Setting an advertising budget is a forecasting exercise. What are the fundamental principles that should be adhered to when undertaking forecasting? Be conservative and use the best evidence-based technique available Be innovative and use multiple methods and choose the optimal one Be conservative and use multiple evidence-based techniques, taking the average result Be innovative and use multiple evidence-based techniques, taking the average resultarrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Contemporary MarketingMarketingISBN:9780357033777Author:Louis E. Boone, David L. KurtzPublisher:Cengage LearningMarketingMarketingISBN:9780357033791Author:Pride, William MPublisher:South Western Educational Publishing
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