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Transcript

Colwick, Kevin

Le, Thanh Ha

Makki, Amr

McKerlie, Chad

Patel, Niralee

Thapa, Aditi

Simple Moving Average

What is it?

Team 2

  • Starbucks logo branded coffee maker

  • It is distributed from five distribution centers in the US

  • They want to simplify the supply chain

  • New system is programmed to use one of two forecasting methods:
  • Simple Moving Average
  • Exponential Smoothing

Forecasting Supply Chain Demand: Starbucks Corporation

  • Three Weeks and Five Weeks of Data

  • Evaluation Methods
  • Mean Absolute Deviation
  • Mean Absolute Percent Error
  • Tracking Signal

  • Simple Moving Average Results:
  • 3-Week data is less biased
  • 28% Error from Actual Demand

Exponential Smoothing

Future Considerations

  • Three Weeks and Five Weeks of Data

  • No need to continually carry large amounts of historical data

  • Most used of all forecasting techniques

  • Exponential Smoothing Results:
  • .4 alpha-value is less biased
  • 26.3 % Error from Actual Demand

In Conclusion

Exponential Smoothing is the Forecasting Method of Choice

  • Provides more accurate results
  • Easy to use and requires little computation

Starbucks should consolidate to a single distribution center

  • Uniform data
  • Lower maintenance cost

Any Questions?

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