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Illinois Superconductor Corp. a technology start-up, came up with an innovative new superconducting filter for use in cellular base stations. It needed to estimate the demand for its filters. The manager came up with a simple chain-ratio-based forecasting model that, while simple and intuitive, was too simplistic. The company had also commissioned a research firm to develop a model-based forecast. The model-based forecast used diffusion modeling, analogy-based forecasting, and conjoint analysis to create a forecast that incorporated customer preferences, diffusion effects, and competitive dynamics.

To use the data to generate a model-based forecast and to reconcile the model-based forecast with the manager's forecast. Requires sophisticated spreadsheet modeling and the application of advanced forecasting techniques.

This case study intends to add knowledge and understanding of supply chain management particularly with respect to international logistics.

The case study can be used in both undergraduate and postgraduate levels. Students pursuing Master of Science in Logistics, Supply Chain Management and those doing bachelor degrees in the same areas can have a better insight and special interest of the case. Professional boards may also use the case to empirically make students understand this area.

The railway sub-sector in East Africa – Tanzania in particular – is an important transport mode but has a declining performance. The market share is estimated at only 4 percent of the freight market. Still knowledge about traffic, particularly for freight, is scant. The main dilemma is whether traffic of the central corridor is more intra- or inter-Tanzania. The case studies techniques appropriate for meaningful traffic forecasting and through a simple regression model it resolves the freight conflicts between Kenya rail and the Central Corridor. It provides students with applied traffic forecasting tools.

The case focuses on techniques of traffic forecasting, development of traffic scenarios and on issues related to intermodal transport especially between road, rail and ocean. At the end of using this Case students should be able to: explain the methods, techniques and models used in traffic forecasting; understand intermodal linkages in international Logistics; use different approaches to make logistics market assessment; and forecast traffic in all modes using different scenarios.

Teaching notes are available for educators only. Please contact your library to gain login details or e-mail support@emeraldinsight.com to request teaching notes.

Forecasting.

The case is intended for Postgraduate level management students.

The purpose of this case study is to explain various forecasting techniques, their applicability and the importance of forecasting to the students. This case also explains the management situations where the application of one technique may not be sufficient, thereby explaining the importance of simultaneous usage of qualitative and quantitative techniques for making crucial decisions. The case is focused on the district of Etah of the state of Uttar Pradesh in India. The real-life situation of elections in this district of an Indian state has been taken to explain the critical nature of forecasting accuracy in a management situation where the manager has only one chance to execute his project. Discussion in this case is limited to explaining various techniques available for forecasting and their applications and does not provide a solution to a management problem.

The students are expected to understand various forecasting methods and the managerial situations where these can be applied. The case also explains situations where it becomes extremely important to have fairly accurate estimates of future requirements and the application of one technique may not be sufficient, thereby explaining the importance of simultaneous usage of qualitative and quantitative techniques for making crucial decisions.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 9: Operations and Logistics.

This case looks at an important business task: forecasting a new product. The case can be used to teach finance, marketing (new product introduction), and healthcare strategy. The product is one of Amgen's most important new products: denosumab. On the surface, the case is fairly easy; students simply have to do some simple mathematical calculations. However, the challenges of forecasting quickly become apparent; every forecast depends on some critical assumptions, and the answer can vary dramatically.

Highlight the importance of forecasting as a business task. Give students the opportunity to create a forecast, using logical assumptions to generate an answer. Illustrate how dramatically forecasts can vary. Demonstrate why sensitivity analysis and customer understanding are both critical when trying to forecast a new product launch.

EC-Creamery is an Eau Claire, WI based dairy processor selling yogurt products throughout the Midwest region of the U.S. Inaccurate forecasts have wreaked havoc in the company, leading to frequent stockouts and creating operational challenges. Your task is to draw on the information you obtain from your colleagues to develop sales forecasts, document your choices and procedures and share your thoughts and insights on issues related to forecasting and sales & operations planning.

This case is appropriate for use in undergraduate and MBA courses.

This case can be used in courses in business ethics, leading teams and organizations or business strategy. The focus of the case aligns well with discussions of managing up, navigating changes in top leadership and conflicts between executive vision and future company growth. Instructors that choose to emphasize the ethical approach could assign this case to explore tradeoffs between loyalty to current and future bosses.

Associate Director of Forecasting Cindy March faces a multi-faceted dilemma as biotech firm Veracity’s acquisition date by pharmaceutical giant Makhola approaches. After a new competitor enters the market, March expects Veracity drug Sangren’s future revenue to drop to $600m in 2019, but the outgoing Veracity CEO refuses to accept a forecast of less than $700m. March suspects that the CEO is intent on handing over a financially successful company and is overly optimistic about Sangren’s ability to maintain market share. In two weeks, March is due to present a 2019 Sangren forecast to incoming Makhola leadership, who she anticipates becoming her direct boss after the acquisition. Should March present the inflated forecasts and accept the poor reflection on her professional abilities or should she refuse to present numbers she does not believe in?

By analyzing and discussing the case, students should be able to:Evaluate the potential business and ethical conflicts arising from decision-making based on both data and intuition. Synthesize an appropriate strategy for navigating tradeoffs between current and future leadership.Analyze the gender dynamics of male-dominated executive leadership structures and strategies for female employees to combat gender biases.

The Behavioral Science Guys, 2015. One Simple Skill to Curb Unconscious Gender Bias. YouTube. https://www.youtube.com/watch?v=SEHi4yauhu8&ab_channel=VitalSmartsVideoTeaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 6: Human resources.

This case follows the performance review and financial-statement-forecasting decisions of a Value Line analyst for the retail building-supply industry in October 2002. The case contrasts the strong operating performance of Home Depot with the strong stock-market performance of Lowe's. Students examine a financial ratio analysis for Home Depot that acts as a template to generate a comparable ratio analysis for Lowe's. The student ratio analysis is designed to build intuition with respect to interpreting individual ratios as well as ratio interrelationships (e.g., the DuPont framework). The historical-performance comparison suggests that investors are skeptical of the ability of Home Depot to maintain its performance trajectory, yet they project sustained improvements for Lowe's. Students are invited to scrutinize the analyst's five-year income-statement and asset-side balance sheet forecast for Home Depot. The case expressly focuses on the asset side of the balance sheet as a preview for other cases using free-cash-flow forecasting. The Home Depot forecast exercise exposes students to the mechanics of financial-statement modeling and sensitivity analysis, which they can use in building their own forecast for Lowe's. Finally, the strong-growth assumptions for Home Depot relative to the modest-growth forecast for the industry suggest that the company can be expected to capture massive and perhaps unreasonable market share in the near term. The exercise provides a striking example of the importance of comparing bottom-up business forecasting with top-down industry forecasts.

This is the first implementation of Revenue Management System in a major international hotel chain in India. The case describes the history of development, corporate story of overdrive for profit, system integration issues. It describes two components of a revenue management system, forecasting and optimization. It also raises several questions that need to be addressed before implementing a RMS.

Teuer Furniture is a privately owned, moderately sized chain of upscale home furnishing showrooms in the United States. The firm survived the economic recession and by the end of 2012, it has regained its financial footing. Now that the firm is more secure financially, some of its long-term investors have asked to cash out their investments. This will be the first time that Teuer has repurchased its equity; the company has paid dividends since 2009. Chief financial officer Jennifer Jerabek and her team have been given the task of valuing Teuer using a discounted cash flow approach. The discount rate is given in the case, and the students need to build a pro forma income statement, balance sheet, and cash flow statement and then calculate a per-share value for Teuer.

• Estimate firm value using a discounted cash flow approach

• Construct firm-level estimates of the pro forma income statement, balance sheet, and cash flow from assets based on store-level estimates

• Recognize how forecasts of revenues, costs, and capital investment are constructed, how the individual estimates relate to each other, and how the forecasts depend upon the underlying economics of the business

• Evaluate and defend the validity of the firm’s forecasts and the valuation model

Estimate firm value using a discounted cash flow approach

Construct firm-level estimates of the pro forma income statement, balance sheet, and cash flow from assets based on store-level estimates

Recognize how forecasts of revenues, costs, and capital investment are constructed, how the individual estimates relate to each other, and how the forecasts depend upon the underlying economics of the business

Evaluate and defend the validity of the firm’s forecasts and the valuation model

Bicycle industry, emerging markets, competitor analysis, financial forecasting.

This case can be used as a teaching tool in the following courses: MBA/post-graduate programs in management in management accounting, management control systems and strategic cost management; executive training programs for middle and senior level employees; and under-graduate/post-graduate programs in entrepreneurship. It can be used to explain and test the concepts of SWOT analysis, Porter's five forces model and PEST analysis. It introduces the technique of breakeven analysis and its relationship with operating leverage. Moreover, it demonstrates the application and analyses of the Du Pont equation.

Hero Cycles Ltd was established by the four Munjal brothers in pre-independence India. It started off as a business of bicycle spare parts, but quickly expanded in post-independence India, with Ludhiana as its base. The company later joined with foreign firms like Honda Motors, Japan to become the largest manufacturers of bicycles in the world. It dominates domestic markets with a market share of around 40 percent. Ananth Munjal, a learned, ambitious and cautious individual, is the next generation, ready to take over the reins of the company. Being someone who believes in learning from past mistakes, he forms a team to critically examine the decisions made by his predecessors. This team is also directed to utilize forecasting techniques for determining the expected profitability given the existing state of affairs that prevail. Additionally, Du Pont analysis is to be performed for studying the efficiency of the company on the facets of operating performance, asset turnover and associated financial leverage. Also, Ananth's risk-averse nature compels him to study the past with regard to the relationship between operating leverage, breakeven sales and corresponding margin of safety. Furthermore, he wishes to inspect the historical cost structure of the firm, and its influence on company performance.

These include the use of: SWOT analysis to identify the strengths, weaknesses, opportunities and threats to a company; PEST analysis to identify the political, economic, social and technological factors that affect the operations of a company; Porter's five forces model to analyse an industry. The case also helps students: by identifying fixed costs and variable costs that are a part of operating expenditure of a business; in the use of forecasting the financials of a company for the sake of predicting the future outcomes of certain business strategies; by application of Du Pont analysis to examine the efficiency of the various processes and strategies; in determining quantitative terms like contribution margin, breakeven sales, operating leverage, margin of safety, their significance, and the relationship between these terms.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.