Demand Management Plan

Prepare a 7-page demand management plan, including a forecasting, inventory management, and scheduling analysis, as well as recommendations, for a provided scenario or business of your choice. Wild Dog Coffee Company, a locally owned company with a single coffee shop location, serves a wide selection of espresso beverages, small breakfast and lunch menu items, and a limited evening menu. The company is planning to expand the business by adding an additional location. While different menu items may be tested at the new location, their core processes will remain the same. You have been working on a process improvement in preparation for the expansion and are now turning your attention to demand management. Your Role As an owner of Wild Dog Coffee Company, you and your business partners are planning the opening of a second location. You need to prepare an analysis and recommendations for demand management, including forecasting, inventory, and scheduling, for your current location, so you can refine the model before opening the second location. Requirements Include the following in your demand management plan: Assess the impact of advertising on product demand. If using Wild Dog Coffee Company, the following basic assumptions will help you prepare a demand forecast: The other owners of Wild Dog Coffee Company handle the business' marketing and sales functions, and they believe that advertising expenditures impact the sale of coffee beverages. They want you to confirm whether or not their advertising dollars are driving sales. Here is what was agreed upon by all the owners: Questions Responses How many espresso beverages are made each hour? 30, on average How many ounces of espresso beans are used for each beverage? 1.5 ounces How many hours per day is the coffee shop open? 6:00 a.m.-8:00 p.m., Sunday-Saturday How many days each month is the business open? 364 days per year. The coffee shop is closed on Christmas day. Wild Dog Coffee Business Information You have the following six months of data to work with for pounds of espresso beans (y) used each month and monthly advertising expenditures (x): Month Lbs/Beans (y) Advertising Dollars (x) 1 987 $1,050 2 1,412 $1,500 3 1,020 $1,000 4 1,140 $1,250 5 1,322 $1,500 6 1,399 $1,500 Espresso Bean Use and Advertising Interpret the forecasting model for the selected product. Use a simple linear regression model to show your forecast. If using Wild Dog Coffee Company, forecast the pounds of espresso beans needed for month 7 if the advertising budget for month 7 is $1,350. Interpret the model and respond to the following questions for Wild Dog Coffee Company: How many espresso beverages will the company need to prepare, on average, each day? How many pounds of espresso beans will the company need, on average, each day? To what extent do advertising dollars predict the need for espresso beans? Prepare an inventory management analysis for the selected product. In your analysis, include two different approaches to inventory management. What are the pros and cons of each system you analyzed? If using Wild Dog Coffee Company, the following provides additional information you have gathered from the inventory management analysis: