The Gonzales Electric Company’s 12 products are further grouped into four

The Gonzales Electric Company’s 12 products are further grouped into four product families.  Products A, B, and C compose family 1; D, E, and F compose family 2; G, H, and I compose family 3; and products J, K, and L make up family 4.  Dick Gonzales has the following forecasts of monthly demand for each product:

Family    Product    Forecast    $/unit
1    A    40    1,000
B    12    1,250
C    50    900
2    D    40    5,000
E    30    7,000
F    10    9,000
3    G    100    250
H    300    100
I    450    100
4    J    8    5,625
K    5    10,000
L    14    7,500

Gonzales’s sales force has also come up with the monthly forecasts of sales for each product family.

Family    $ Sales
1    115,000
2    550,000
3    125,000
4    210,000

a. Roll up the individual product forecasts and compare them to the forecast provided by the sales force.  Using a spreadsheet, roll down the forecast to make the individual item forecast agree with the sales force forecast.  Calculate dollar value and number of units in each individual item’s forecast.

b. Top management has independently decided to set a $1,200,000 overall monthly sales goal for the company.  Adjust the sales force forecast to reflect this new goal; then roll down the forecast to the individual item level.  Calculate dollar value and number of units in each individual item’s forecast.

Here’s the SOLUTION

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