Question

In: Operations Management

Consider the following scenario: You run UCIO, a British utility supplying electricity to the London metropolitan...

Consider the following scenario:

You run UCIO, a British utility supplying electricity to the London metropolitan area. You need to decide how much capacity to have on line, and two conflicting goals must be resolved in order to make an appropriate decision. You obviously want to have enough capacity to meet average demand, but that is not enough, because demand is uneven throughout the year. In particular, demand skyrockets during summer heat waves -- which occur randomly -- as more and more people run their air conditioners constantly. If you don't have sufficient capacity to meet peak demand, you get bad press. On the other hand, if you have a large amount of excess capacity over most of the year, you also get bad press.

What sorts of forecasts would be useful in the following decision making situations? Why? What sorts of data might you need to produce such forecasts?

this is a question for demand planning and forecasting. i don't think or have any additional information than this.

Solutions

Expert Solution

While choosing the right forecast measure we should consider the following parameters:

a. The objective of the forecast or the problem which we aim to solve through the forecasting method.

b. Level of accuracy required.

c. Cost of the method to do the forecast and data collection

d. Type of data available that can be used for the forecast and data quality as well as the historical period of data availability.

Based on the question in the given scenario, there is an objective to forecast the demand pattern and the trend. Therefore time series analysis method of forecasting would be most appropriate. The reason is the quantitative nature of data. Within the time series method of forecasting, we should select the X-11 techniques because there is clear seasonality in demand and these techniques give very accurate results in case of seasonal variation. This method requires at least three years of data and if longer period data is available the forecast accuracy will increase further. data on the consumption and other factors that might impact the demand should also be collected. This method is also suitable for medium term forecasting which is 3 months to 1 year.


Related Solutions

Question: Consider the following scenario. Assume the price of gold in London is selling for $1400...
Question: Consider the following scenario. Assume the price of gold in London is selling for $1400 an ounce while in New York it is fetching a price of $1450 an ounce. What would an economist say about the efficiency of this market? What would an economist predict about what would happen next?
Suppose you are the manager of a public utility that supplies electricity to a significant portion...
Suppose you are the manager of a public utility that supplies electricity to a significant portion of your geographic region. You preside over electrical generation facilities that can produce electricity using either natural gas or oil, or some combination of both. In the past several years, you have been faced with skyrocketing, then plummeting, natural gas prices, and now think you face the possibility of more of the same, coupled with the probability of similar volatility in oil prices. Having...
Consider an electric utility whose regulated price (tariff) for electricity is equal to its average cost....
Consider an electric utility whose regulated price (tariff) for electricity is equal to its average cost. The utility has total revenue of $10 million per week. Because of weak incentives to keep its costs low, its average cost is 10 percent higher than the average cost that an efficient firm could achieve. The price elasticity of demand is estimated to be –0.4. a) How much more total surplus per week could be achieved if the firm produced efficiently, and regulators...
Consider the following scenario: In this assignment, you will consider the need for security controls to...
Consider the following scenario: In this assignment, you will consider the need for security controls to protect the availability, confidentiality, and integrity of electronic data. Continuing with the scenario from Week 2 Discussion, every registered user of Paul Gray's online share trading company is required to read the safety and privacy page of the portal. As a secure portal, it has Secure Socket Layer (SSL) as a security measure. Gray has asked you to help him with this aspect of...
Consider the following scenario in a large open economy using the loanable funds model (long run),...
Consider the following scenario in a large open economy using the loanable funds model (long run), suppose there is a technological breakthrough that increases investment demand a. graph and explain what happens to savings, investment , the real interest rate,net capital flows, net exports and the real exchange rate b. compare what happens to the level of investment in a closed conomy to the level of investment in a large open economy
This assignment asks you to consider a negotiation scenario with family members. Consider this scenario: You...
This assignment asks you to consider a negotiation scenario with family members. Consider this scenario: You and your brother work for your father’s successful family business, which employs 15 individuals. Your role has evolved from being the Chief Machinist to being the General Manager and main salesperson for the business. Your brother has creative talent and is good at designing and fabrication, but is not strong in interpersonal skills. Additionally, your brother does not take care of his personal appearance...
Scenario You are a commodity manager hedging British Airways’ price exposure to jet fuel oil for...
Scenario You are a commodity manager hedging British Airways’ price exposure to jet fuel oil for the next 2 years. The company requires 100,000 gallons per month (1,200,000 gallons p.a.) of jet fuel oil. Time period is Jan21-Dec21. Task/ Procedure In a report of no more than 1000 words, create a risk management strategy to explain how to minimise BA’s price risk exposure. It is expected that you will explain your strategy, using your own data and your own research,...
Consider the following scenario. You just accepted an opportunity to manage and operate a business that...
Consider the following scenario. You just accepted an opportunity to manage and operate a business that you do not know much about. What financial information would you need to analyze the company’s capital structure and how could it be used to advance business operations? Describes what Capital Structure and capitalization is and why it is important. Describe and Detail: The sources and value of the various forms of leverage that are used in companies, explaining how any debt, equity, or...
Consider the following scenario:   Suppose you are on the information services team of a large advertising...
Consider the following scenario:   Suppose you are on the information services team of a large advertising firm. Your team holds a secret meeting to talk about ways to improve productivity. The company president wants to ensure employees are not sending personal e-mails or surfing the web for entertainment at work. The Chief Information Officer (CIO) suggests that employees be informed that their e-mails and web services will be monitored. In truth, the company does not have the resources to do...
For this Discussion, consider yourself in the following scenario: As an instructional designer, you have noticed...
For this Discussion, consider yourself in the following scenario: As an instructional designer, you have noticed an increased attrition rate in a particular online course. The facilitators of the course have reported back to you that students have demonstrated a lack of motivation to participate in and complete the course. Based on Learning Resources, first identify what factors are most likely to motivate someone in an online classroom (these factors could be intrinsic or extrinsic). Next, create a plan to...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT