Otm 300 - Berkshire Manor

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important to consider the gross margin and the already higher profit that comes with the high roller rooms.

C) If history shows that 10% of reservations end up as no-shows, we would want to adjust our demand forecast accordingly and sell 10% more rooms. This would change your analysis as it would be important to consider that a significant part of rooms may be left empty and the Berkshire Manor may take a loss if the demand forecast is not adjusted.

Bonnie’s Boutique

A) Based on the A/F ratios Mary tends to over-estimate demand for both gift and clothing items. Accurate forecasts have an A/F ratio that is equal to 1, however, the A/F ratios for Mary are both less than 1 meaning the forecasts are too high. Due to the fact that Mary has an A/F ratio mean closer to one (0.985653) for clothing items we can assume that she is more accurate with this set of items. Therefore, Mary is closer to predicting the actual demand for the clothing. Additionally, the small standard deviation for holiday souvenirs could mean Mary consistently over orders these items.

B) Demand Forecast: 110 shirts

Forecast Demand mean: (110) *(.985653) =108.422

Forecast Standard Deviation (110) *(.176651) =19.432

C) Forecast Demand: 90

Forecast Demand mean: (90) *(.8437672) =75.9386

Forecast Standard Deviation: (90) *(.023184) =2.0866

D) z=80-75.9386 / 2.0866

z=1.94643--1.95

Stock-in percentage= 0.97441

Stock-out percentage=1-0.97441= 0.02559 or 2.559%

E) 1-.001=0.999

Z-score=3.09

3.09= Q-75.9386/2.0866

Q=82.386 or 83