Case Study: Northcutt Bikes: The Forecasting Problem

Case Study: Northcutt Bikes: The Forecasting Problem. Jan Northcutt, owner of Northcutt Bikes, started business in 1995 when she noticed
the quality of bikes she purchased for sale in her bike shop declining while the prices
went up. She also found it more difficult to obtain the features she wanted on ordered
bikes without waiting for months. Her frustration turned to a determination to build
her own bikes to her particular customer specification.

Tasks

Case Study: Northcutt Bikes: The Forecasting Problem

1. Plot the data and describe what you see. What does it mean and how would you
use the information from the plot to help you develop a forecast?
2. Use at least two different methodologies to develop as accurate a forecast for
the demand as possible. Use each of those methods to project the next four
months demand.
3. Which method from question 2 is “better”? How do you know that?
4. How, if at all, could we use Jan’s knowledge of the market to improve the fore-cast? Would it be better to forecast in quarterly increments instead of monthly?
Why or why not?
5. Are there other possible approaches that might improve Jan’s operation and
situation? What would they be and how could they help?
6. Has Jan’s operation grown too large for her to control well? Why or why not?
What would you suggest she do? What additional information would yousug-gest she lookfor to help her situation?

Case Study: Northcutt Bikes: The Forecasting Problem

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