Answer & Explanation:Answer the 4 questions in the attached document.Submit only one Microsoft Word document. Clearly indicate when each question is answered in your submission, explain your findings, and include any calculations.
forecasting_and_inventory_management.docx
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1. The registrar at State University believes that decreases in the number of freshman
applications that have been experienced are directly related to tuition increases. They
have collected the following enrollment and tuition data for the past decade:
a. Develop a linear regression model for these data and forecast the number of
applications for State University if tuition increases to $10,000 per year and if tuition
is lowered to $7,000 per year.
b. Determine the strength of the linear relationship between freshman applications and
tuition using correlation.
c. Describe the various planning decisions for State University that would be affected by
the forecast for freshman applications.
2. Apperson and Fitz is a chain of clothing stores that caters to high school and college
students. It publishes a quarterly catalog and operates a website that features
provocatively attired males and females. The website is very expensive to maintain, and
company executives are not sure if the number of hits at the site relate to sales; that is,
people may be looking at the site for the pictures rather than as potential customers. The
webmaster has accumulated the following data for hits per month and orders placed at the
website for the past 20 months.
•
•
Develop a linear regression model for these data and indicate if there appears to
be a strong relationship between website hits and orders.
What would be the forecast for orders with 60,000 hits per month?
3. The Sofaworld Company purchases upholstery material from Barrett Textiles. The
company uses 45,000 yards of materials per year to make sofas. The cost of ordering
material from the textile company is $1500 per order. It costs Sofaworld $0.70 annually
to hold a yard of material in inventory. Determine the optimal number of yards of
material Sofaworld should order, the minimum total inventory cost, the optimal number
of orders per year, and the optimal time between orders.
4. The EastCoasters Bicycle Shop stocks bikes, helmets, clothing, a variety of bike parts
including chains, gears, tires, wheels, and biking accessories. The shop is in a storefront
location on a busy street and it has very limited storage space for inventory. It often runs
out of items and is unable to serve customers. To help manage its inventory the shop
would like to classify the stock using the ABC system. Following is a list of items the
shop stocks and the annual demand and unit value for each:
•
Classify the inventory items according to the ABC approach using dollar value of
annual demand.
…
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