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Case Study Comm 225

In: Business and Management

Submitted By yoyo806
Words 1511
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Q1:
Social media can potentially have many beneficial effects on the operations department of Stone Cold. Social media can be used to target potential customers, which in return will increase the overall efficiency of the company. Because people usually reveal where they are from or where they currently live on their social media accounts, companies will be able to pinpoint which stores will face higher demand and will therefore be able to allocate the resources efficiently. Also by sending out coupons and analyzing redemption rates, the marketing department in conjunction with the operations department will be able to better forecast the demand for the Cold Stone products. This tactic can also be used to forecast the demand for many aspects of the business such as the demand for a certain flavour of ice cream. Because of social media's interactive aspect, people can interact among each other and comment on different aspects of Stone Cold. The operations department will use this feedback to better serve the customers. Ultimately, social media advertising can act as a bridge between the company and the customers. It provides the operations department with crucial information that they can use to forecast demand more accurately, produce more efficiently, reduce expenses, and in the end reduce their overall expenses and increase their profits.
Storage
Storage
Storage
Storage
Q2:
Social media
Social media

Supplier of raw materials
Supplier of raw materials

Producer/manufacturer of Ice cream
Producer/manufacturer of Ice cream

Franchise
Franchise

Customers
Customers
Distributor
Distributor
Headquarters Headquarters

Producer of ice cream accessories (cones, toppings, etc.)
Producer of ice cream accessories (cones, toppings, etc.)

Franchise
Franchise

Storage
Storage

The chain starts at the Cold Stone headquarters. All of the decisions that are made at the headquarters affect the entire chain. In this case, only the decision of making new flavored ice cream will be discussed. When all the producers of the ice cream and ice cream related products get the news, they produce the ice cream. They will order supplies from the suppliers who will send them from the factory directly or from the storage. When the producers make the ice cream, they will either send all, part or (depending if it’s just-in-time manufacturing) none of the production to storage which will then send it to the distributor or they send it directly to the distributor. The distributor then sends the products to the various franchises who then sell the ice cream to the customers. Assuming that all of the ice cream and accessories are made in the United States (or at least on the same continent), transportation by truck will be the method used to transport the ice cream. Also, the headquarters will work with different types of social media to contact and inform the customers about the various new products or promotions offered by Cold Stone.

Q3:
a) Moving Average (4 years)
* (See figure 1 in Appendix for the table)
F2013 = 337.25
b) Exponential Smoothing with smoothing constant of 0.3
*(See figure 2 in Appendix for the table)
Example of calculation for F2013
Ft = 0.7Ft-1+ 0.3At-1
F2013 = 0.7×335 + 0.3×332
F2013 = 234.5 + 99.6
F2013 = 334.1 ≈ 334

c) Linear trend equation
* (See figures 3 and 4 in Appendix for tables on how to find equation and on the forecasts)
How to find the equation and the forecast b = nΣty-ΣtΣynΣt2-(Σt)2 b = = 1.22 a = Σy-bΣtn a = = 309.24 y19 = 309.24 + 1.22 (19) = 332.42

d) MAD values
By looking at the three tables for the different methods, it can be seen that the four year moving average has the smallest MAD value with 13.36. This value is smaller than 14.47 for exponential smoothing and 13.78 for linear trend. Based on MAD values, the four year moving average is the most accurate method to forecast with.

Q4:
According to a study conducted by Boeing, the time is takes to board all passengers on a plane has doubled over the last decades. Although one would imagine that such delays may result in late penalties and fees for airline companies, major United States airlines have seen their revenue increase. These companies began charging fees for checked baggage which has hindered the boarding process and rendered it completely inefficient.
These measures were put in place to increase the airlines’ revenue at the expense of the consumer. The airlines even began offering various services that would enable certain passengers to acquire priority levels when it came to boarding as a result of long waiting times for an additional fee. All these extra charges greatly benefited the airline companies and created a new source of income. In fact, a report by Amadeus suggests that “these additional charges amount up to 12.5 billion dollars” from 2010 to 2011 which is equivalent to a staggering 87%.
Concerning the passengers, this spike in boarding time has resulted in a far less enjoyable travelling experience as well as more expensive one. In order to escape the checked-baggage fee, many passengers have to take more carry-ons in order to cram their belongings and this has slowed down the whole process. The passengers are complaining about this lengthier procedure which is becoming “even more frustrating than the security lanes”.
In order to remedy to this situation, several measures can be put in place so as to reduce overall boarding time. The problem obviously arises from the increase in on-board luggage do to the checked-baggage fee; so the obvious step would be to eliminate this charge.
In addition, the airlines should consider reducing the number of seats on airplanes in order to allow for a better traffic flow and a higher availability of in-cabin space for carry-ons. They could higher fares to make up for the loss in passengers which would make the overall experience more pleasant even it is slightly more expensive. Finally another solution would be to add a double gate system to allow for front and rear entry into the airplane which will get rid of bottlenecks and decrease overall boarding time.

Appendix

CASE 1
Figure 1 Four Year Moving Average | Year | Forecast | Actual | abs(Act. - Fore.) | 1995 | N/A | 341 | N/A | 1996 | N/A | 331 | N/A | 1997 | N/A | 317 | N/A | 1998 | N/A | 315 | N/A | 1999 | 326 | 321 | 5 | 2000 | 321 | 278 | 43 | 2001 | 307.75 | 298 | 9.75 | 2002 | 303 | 311 | 8 | 2003 | 302 | 302 | 0 | 2004 | 297.25 | 302 | 4.75 | 2005 | 303.25 | 335 | 31.75 | 2006 | 312.5 | 320 | 7.5 | 2007 | 314.75 | 309 | 5.75 | 2008 | 316.5 | 346 | 29.5 | 2009 | 327.5 | 329 | 1.5 | 2010 | 326 | 337 | 11 | 2011 | 330.25 | 351 | 20.75 | 2012 | 340.75 | 332 | 8.75 | 2013 | 337.25 | N/A | N/A | | | | (MAD) 13.36 |

Figure 2 Exponential Smoothing | Year | Forecast | Actual | abs(Act. - Fore.) | 1995 | N/A | 341 | N/A | 1996 | 341.00 | 331 | 10.00 | 1997 | 338.00 | 317 | 21.00 | 1998 | 331.70 | 315 | 16.70 | 1999 | 326.69 | 321 | 5.69 | 2000 | 324.98 | 278 | 46.98 | 2001 | 310.89 | 298 | 12.89 | 2002 | 307.02 | 311 | 3.98 | 2003 | 308.22 | 302 | 6.22 | 2004 | 306.35 | 302 | 4.35 | 2005 | 305.05 | 335 | 29.95 | 2006 | 314.03 | 320 | 5.97 | 2007 | 315.82 | 309 | 6.82 | 2008 | 313.78 | 346 | 32.22 | 2009 | 323.44 | 329 | 5.56 | 2010 | 325.11 | 337 | 11.89 | 2011 | 328.68 | 351 | 22.32 | 2012 | 335.37 | 332 | 3.37 | 2013 | 334.36 | N/A | N/A | | | | (MAD) 14.47 |

Figure 3 Linear Trend | Year | Forecast | Actual | abs(Act. - Fore.) | 1995 | 310.46 | 341 | 30.54 | 1996 | 311.68 | 331 | 19.32 | 1997 | 312.90 | 317 | 4.1 | 1998 | 314.12 | 315 | 0.88 | 1999 | 315.34 | 321 | 5.66 | 2000 | 316.56 | 278 | 38.56 | 2001 | 317.78 | 298 | 19.78 | 2002 | 319.00 | 311 | 8 | 2003 | 320.22 | 302 | 18.22 | 2004 | 321.44 | 302 | 19.44 | 2005 | 322.66 | 335 | 12.34 | 2006 | 323.88 | 320 | 3.88 | 2007 | 325.10 | 309 | 16.1 | 2008 | 326.32 | 346 | 19.68 | 2009 | 327.54 | 329 | 1.46 | 2010 | 328.76 | 337 | 8.24 | 2011 | 329.98 | 351 | 21.02 | 2012 | 331.20 | 332 | 0.8 | 2013 | 332.42 | N/A | N/A | | | | (MAD) 13.78 |

Figure 4 How to find Equation for Trend | Year (t) | y | ty | t^2 | 1 (1995) | 341 | 341 | 1 | 2 (1996) | 331 | 662 | 4 | 3 (1997) | 317 | 951 | 9 | 4 (1998) | 315 | 1260 | 16 | 5 (1999) | 321 | 1605 | 25 | 6 (2000) | 278 | 1668 | 36 | 7 (2001) | 298 | 2086 | 49 | 8 (2002) | 311 | 2488 | 64 | 9 (2003) | 302 | 2718 | 81 | 10 (2004) | 302 | 3020 | 100 | 11 (2005) | 335 | 3685 | 121 | 12 (2006) | 320 | 3840 | 144 | 13 (2007) | 309 | 4017 | 169 | 14 (2008) | 346 | 4844 | 196 | 15 (2009) | 329 | 4935 | 225 | 16 (2010) | 337 | 5392 | 256 | 17 (2011) | 351 | 5967 | 289 | 18 (2012) | 332 | 5976 | 324 | 171 | 5775 | 55455 | 2109 |…...

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