Spintware Inc Sales Report

Spintware Inc Sales Report

Sprintware Inc is a retailer of sports shoes. They cater for ages 5 and up and for both genders. Their range of shoes include running shoes for road, trail and cross training. Each of these categories cater for flat-footed (pronation), normal, and high-arched (supination) individuals. The Sprintware group consists of 27 stores across six countries in Africa.

Mr Gump, the owner and founder of the company, for a year has been meeting bi-annually with top management and professional athletes to try to determine the next trend in shoe style, as well as the demand for the shoes.

This has worked fairly well in the past, but Mr. Gump feels that, with the increase in the number of stores, this process is becoming tedious. At the same time Mr. Gump would like to free himself from the management of demand forecasting and focus more on further expansion of the African continent.

You have been appointed as the new Operations Manager with an initial focus on a more rigorous approach to forecasting.

The monthly number of shoe sales over the last three years is given in the table below:

Monthly sales
MonthRoadTrailCross Training
Jan-1522 40018 60014 400
Feb-1521 50019 90015 000
Mar-1522 40021 50015 800
Apr-1521 50021 10016 400
May-1521 30021 50015 700
Jun-1520 90022 10014 900
Jul-1520 10022 80014 300
Aug-1521 70024 40013 900
Sep-1520 60025 40013 500
Oct-1520 40024 60013 600
Nov-1520 80025 30014 300
Dec-1522 50026 10014 700
Jan-1621 80025 30015 700
Feb-1620 70024 00016 300
Mar-1621 90025 90017 300
Apr-1621 50025 90017 800
May-1621 70025 90017 100
Jun-1621 50028 00016 200
Jul-1621 90027 20017 500
Aug-1621 20028 60018 200
Sep-1622 00028 30017 700
Oct-1623 80027 20018 900
Nov-1624 50028 30018 300
Dec-1624 50027 50019 400
Jan-1726 20028 30019 200
Feb-1726 70028 60020 000
Mar-1728 00028 00020 600
Apr-1729 70026 90020 800
May-1730 90028 00021 200
Jun-1732 40026 60020 400
Jul-1734 30025 80021 200
Aug-1736 40026 30022 700
Sep-1734 60026 00022 900
Oct-1737 00027 30024 300
Nov-1738 10028 70023 800
Dec-1739 60027 60022 800

Some of the newer stores do not yet have any sales data to lean on to ascertain the number of shoes to order from head office. Some investigation of other stores has shown that the prediction of the demand for shoes is correlated with the number of memberships at local gyms.

For one of the stores, you have been asked to use a simple linear regression model to work out the number of road shoes to send to the store, based on the fact that the city in which the store is located has an approximate gym membership of 7 500 people.

Data obtained from other stores and their approximate gym memberships are shown in the following table:

Pairs of shoes soldGym memberships
1544 000
51814 000
44714 000
2103 800
1792 300
3776 600
2798 100
56110 000
2927 500
2095 900
4258 700
4417 800
63515 000
3426 900
4226 900
4809 900
3409 800
37311 600
1963 400
48811 900
41310 300
4679 500
3678 800
1573 600

Assignment questions

1. Include an executive summary highlighting the purpose of the assignment and describing what is covered. (10 marks)

2. Discuss why forecasting is necessary. (10 marks)

3. Determine the difference between quantitative and qualitative measures. (10 marks) 4. Discuss examples of quantitateve forecasting methods that could be used for this scenario. (10 marks)
5. Complete the following calculations using the formula and data provided: Naïve method for the road shoes (10 marks) Moving average for the trail shoes (10 marks) Exponential smoothing for the cross-training shoes (10 marks) 6. Create a linear regression model to work out the expected number pairs of shoes sold for the new store. (20 marks)
7.1 Logical structure of assignment (5 marks) 7.2 Technical quality of assignment (5 marks)
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