CYCLOTRON BIKES, INC.*

Cyclotron Bikes, Inc. was established in 1959 by a passionate entrepreneur that wanted people to enjoy the nature as well as to stay healthy by making use of the bike. The founder of the company, Byron Funmaker, manufactured these bicycles in a small garage in rural Wisconsin. After manufacturing these bicycles, he used to haul them to a rented shop in a town close by, to sell. Gradually, the reputation of the Cyclotron Bikes rose due to the attention to quality and details Byron paid to this small scale operation. Simultaneously, there were interesting developments occurring in the U.S. to help Byron fuel his passion in manufacturing bicycles. In the 60s, the President’s Council of Physical Fitness promoted bicycle for recreation and fitness. This gave a major fillip to bicycle industry in general, and to Cyclotron Bikes, in particular.

The hobby of bicycle riding that was dominated by male until that time got a major boost and proliferated to female riders after Audrey McElmury won the Road Cycling Championship in Brno, Czechoslovakia. This opened the door for the American women to take bicycle as a serious hobby to stay fit and enjoy outdoors. The oil embargo of 1970s coupled with the increasing awareness of conserving environment encouraged bicycle commuting in the U.S.

While all the above interesting events were unfolding, Cyclotron Bikes, Inc. was transitioning from a job order shop to a mass production environment to cater to the demand placed on it. Byron’s two children, Beth and Bart, joined the Bike Company after completing their business degrees. With them, they brought the acumen to take Cyclotron Bikes to the next level because they saw immense future in the bicycle industries worldwide.

In order to bring their ambition to fruition, they have hired a consulting company, i.e., your group, and have provided the company (you) with the data for the past 6 years, 2012-2017. As you can see from the data, the financial year of Cyclotron Bikes corresponds to January through December.   

Cyclotron Bikes’ management has asked your group (consulting company) to provide you the following as part of the management report.

(1) Introduction: Compare similar businesses worldwide and give an outlook of the bike market and future that awaits Cyclotron. (10 points)

(2) Analysis:

(a) Based upon Cyclotron’s data on page #1, compute 4, 5, 6 quarter moving averages and find which moving average will be used if Cyclotron has to forecast for Q1 (April-June) of 2018. Make sure to provide your rationale by using the forecasting error calculation such as MAD, MSE, MAPE, and Tracking Signal. (15 points)

(b) If you have the option of using only the single exponential smoothing method to project for Q1 of 2018, which value of α will be appropriate based upon your calculation of MAD, MSE, MAPE? (15 points)

(c) Calculate the forecast for the next 2 years (8 consecutive quarters) using the Classical Decomposition Method. If Cyclotron is contemplating investing $9m in facility upgrades now and would like to have the Payback period of this new investment as 2 years, do you think this threshold of Payback period can be met if Cyclotron uses 2017 revenue as its baseline? (50 points)

(3) Recommendation:

Based upon your analysis in (2) and your study of bike market in general, provide recommendations for Cyclotron on or before November 21 in terms of the operations/manufacturing tasks the company should undertake to emerge as a market leader in the manufacturing and selling of quality bikes. (10 points)

• Briefly describe the types of economic systems. What is the United States’ economic system and what are the characteristics of this economy?
• What economic role or functions does the U.S. government conduct regularly?
• Why is the U.S. government’s economic role important or unimportant for the U.S. economy? Discuss whether you favor a larger or smaller government role in the economy.

Question Set 5: Economic Growth

Explain how each of the following elements from Question Set 1 will affect long-run economic growth in the United States:

American’s low savings rate.

Rising government deficits in the U.S.

Foreign savings flowing into the U.S.

U.S. business firms’ unwillingness to undertake domestic investment.

1. Please explain why you would or would not think each of the following variables to be normally distributed. [Hint: For normally distributed variable, most of the data are around the middle value and frequency of observations keeps falling as you move away from the middle in both directions]. a. Retirement age of the U.S workers. b. Household income in the U.S. in 2018. c. Height of U.S. adults in 2018. d. Birthweight of girls in the U.S. in 2018. e. Please state an example each of left-skewed and right-skewed variables and justify your answer.

From 1995-2010, the real exchange rate between the Australian dollar and the U.S.

     dollar (measured as the price of U.S. goods divided by the price of Australian goods)

     fell at an average rate of 5% per year. Over the same period, the average annual rate

     of inflation in Australia exceeded U.S. inflation by 2% per year. Given this

     information, what was the average annual percentage change in the nominal exchange

     rate between the two currencies, expressed as Australian dollars per U.S. dollar?

     Show your work and any formulas you use.  

About 60% of U.S full-time college students drank alcohol within a one-month period. You randomly select six U.S. full-time students. Find the probability that the number of U.S. full-time college students who drank alcohol within one-month period isa.Exactly twob.At least threec.Less than fourd.Assume, we sampled 5000 students. What expected number of U.S. full-time drank alcohol within a one-month period?e.From part (d), find the variance and the standard deviation.

2. Consumption spending is a large percentage of GDP in the United States. The ageing population is a demographic certainty. Explain how ageing demographics in the U.S. will affect the economy for each of the two views discussed below.

a. Using key macroeconomic measurements and models explain how ageing demographics traditionally has already affected several economies (such as Japan and Europe.

b. Now explain how ageing demographics will affect U.S. consumers and U.S. consumers and U.S. businesses if older people are behind in saving for their retirement and must continue to work to save more for retirement.

Scenario 2:

Bates Corp 2018 annual report disclosed the following pension information:

Benefit obligations and fair values of plan assets as of December 31, 2018, for Bates’ pension and postretirement plans are as follows:

What conclusions can you draw about the funded status of the company's pension plans and post employment obligation? Is this a concern? Why or why not Explain.

Suppose the interest rate on a 1-year Canadian Treasury bill is 1.53 percent and the interest rate on a 1-year U.S. Treasury bill is 1.7 percent. Assuming uncovered interest parity holds, we would expect