best homes inc. case study

Best Homes: Forecasting Methods

Introduction, forecasting suggestions, forecast decomposition, regional sales projections role.

Best Homes is a company that builds and sells new houses in various areas of the US. Starting Business in 1945, they have been able to expand from the East Coast to Midwest, West Coast and even the south. Their pricing and housing quality ranges greatly, allowing all kinds of individuals to purchase housing that conforms to their income level. Housing is a field that directly deals with one of the most vital needs of individuals – living space. Despite the population numbers continuously expanding, construction companies have to consider both positive and negative changes in demand during their work. The ability of individuals to purchase homes, as well as their willingness to spend a considerable portion of their income on a home depends largely on present political and economic circumstances (Rodrigues et al., 2020). Furthermore, the quality, placement, and management of housing can affect the willingness of people to buy it.

As a result, construction companies have to consider and manage multiple factors of influence, many of which are outside of their immediate control. In a modern competitive landscape, organizations cannot afford to make mistakes, or lose profits. Failing to consider how outside factors influence one’s business means opening it up for potential instability, which can quickly wear down even the most profitable organizations. For this reason, companies in the housing business have to engage in forecasting. The term refers to the practice of predicting future company metrics and business-related events depending on existing evidence. Forecasting can concern a singular organization, an industry, or the entire economy. With the availability of data from Best Homes’ storied past, it is possible to use forecasting to enhance the organizations’ capabilities. This work will focus on discussing potentially effective forecasting methods for Best Homes, as well as applying some of them using the data presented in the case study.

The primary purpose of prediction methods is not to determine the exact demand, the number of products sold, or other indicators. Forecasting is always wrong; the probability of predicting anything in business up to the last digit is almost zero; in this regard, indicators of forecast error are introduced (Schroeder, 2020). Forecasts are based on the need to make various decisions that will have an effect on the future. According to these decisions, the degree of influence, and calculation methods, these methods are classified into several groups. Such a classification is needed to adapt forecasts for various applied problems.

The fundamental division of forecasting methods is quantitative and qualitative approaches. Quantitative ones consider analytical indicators with which it is possible to perform mathematical and statistical calculations. These approaches include the Best Homes method, which works with sales statistics for the last five years and by region to obtain an excellent forecast. Of the advantages of this method, straightforward solutions stand out, of the disadvantages – the need for interpretation and non-obvious dependence on external factors. Demand regulators in the real estate market can include various mechanisms from global economic situations to geopolitical situations that are not subject to the company’s influence (Kim et al., 2020; Gaca, 2019). However, at Best Homes, this quantitative method worked well, driving the company’s sales.

Qualitative methods are ranked according to the different tasks they are aimed at in organizations. In the case of Best Homes, the company needs to pay attention to these approaches since, at this stage, they are not yet implemented in the organization. These methods are more versatile and provide more flexible mechanisms for working with customers, sales, and products but cannot give accurate quantitative estimates (Schroeder, 2020). Best Homes may consider using the life-cycle analog, Delphi, and market surveys (Schroeder, 2020). The life-cycle analogy will allow each product to be viewed through the prize of its life cycle, making it possible to implement in historical sales data and data by region the most frequent factors influencing external and internal factors on the purchase of a house. In addition, this method is designed for a long sales cycle, which contains the construction and further sale of a house (Schroeder, 2020). Market surveys are more difficult to implement, but they can clarify such points as the solvency of the target client group, key aspects when choosing real estate, and the needs of various client groups for their further segmentation.

This approach will be appropriate within a specific region and sales period. Customers in surveys will be able to clarify the reasons for seasonal demand with the region’s specifics. In the long run, this approach loses its effectiveness (Schroeder, 2020). In this regard, Best Homes may implement a similar forecasting method before launching a new development project in a particular region. With data coming from customers, Best Homes can improve the life-cycle analog and have a practical but partial interpretation of quantitative forecasting methods. Finally, one of the longest-running but most detailed quantitative methods, Delphi, can help a company solve complex issues, usually related to external factors. Technological development has picked up a fast pace and now needs to match this pace to remain competitive in terms of resources such as quality and build time (Ullah et al., 2018). A group of experts within this approach can express an outside point of view, enabling Best Homes to find a solution to a problem or a vector for the nearest development. Implementing all three methods at once may be too resource-intensive for Best Homes. On the other hand, the company already has experience in implementing several forecasting methods at once to solve the internal problems of the organization.

Table 1. Decomposition of Best Homes Sales 2016

The decomposition method in sales forecasting is usually applied to monthly or quarterly data when the seasonal nature of demand is evident and when the manager wants to forecast sales for a year and smaller periods. It is essential to determine when the change in sales reflects general, fundamental processes and when it is associated with the seasonality of demand. Just as the demand for sunscreen increases significantly in the regions during the sunniest months, the real estate market has its mechanisms of seasonal demand. Table 1 provides Best Homes 2016 sales to find the average monthly demand for that year. As a rule, such an analysis is carried out for a more significant number of years to identify the seasonality factor to take into account its quantitative indicators for future years.

The nature of changes in the real estate market can be different. First, Best Homes’ trend of increasing sales contributes to a gradual and long-term growth rate. Secondly, seasonality reflects the fluctuations in the time series associated with the change of seasons. This factor usually appears the same every year, although the exact sales pattern may vary from year to year. Thirdly, cyclicity as a factor is not always present since this factor reflects ups and downs with the exclusion of seasonal and erratic fluctuations. These ups and downs usually occur over a long period, perhaps two to five years. New buildings are just included in the goods group that are subject to similar dynamics (Ionașcu et al., 2020). Finally, a random factor is singled out – a component that remains after excluding the trend, cyclicality, and seasonal factor.

These forecasts for the geographic location of new buildings may reflect the influence of factors that are difficult to consider or are not entirely taken into account in the sales statistics of previous years. These include the opening of a new production facility in the region and the influx of people looking for new housing. In addition, regional estimates can show the solvency of the target audience of customers in terms of the number of sales. Based on these data, the company can conclude the geographic location of the launch of a new project. In addition, the scale of such regional assessments is essential since even within the same city, depending on factors such as infrastructure and distance from the center, the price of equally equipped houses can change significantly. Finally, these forecasts will be combined with historical statistical data and the work of the HR department, which must seek and hire experts to build a house according to a particular established algorithm.

This paper provides an analysis of Best Homes in the context of business development planning. The main forecasting methods were considered, their pros and cons were given as part of the implementation to this organization. Regional differentiation and the decomposition method are used as tools for estimating future sales from existing information. As a result, data was obtained for forecasts that are specific to this business and, in particular, to Best Homes.

Gaca, R. (2019). Price as a measure of market value on the real estate market. Real Estate Management and Valuation, 26 (4), 68-77. Web.

Ionașcu, E., Mironiuc, M., Anghel, I., & Huian, M. C. (2020). The Involvement of Real Estate Companies in Sustainable Development—An Analysis from the SDGs Reporting Perspective. Sustainability, 12 (3), 798. Web.

Kim, Y., Choi, S., & Yi, M. Y. (2020). Applying comparable sales method to the automated estimation of real estate prices. Sustainability, 12 (14), 5679.

Rodrigues, P., Lourenço, R., & Hill, R. (2020). House price forecasting and uncertainty: Examining Portugal and Spain. Banco de Portugal . Web.

Schroeder, R. G. (2020). Operations management in the supply chain: decisions and cases . McGraw-Hill US Higher Ed USE. Web.

Ullah, F., Sepasgozar, S. M., & Wang, C. (2018). A systematic review of smart real estate technology: Drivers of, and barriers to, the use of digital disruptive technologies and online platforms . Sustainability, 10 (9), 3142. Web.

Removal Request

If you are the copyright owner of this paper and no longer wish to have your work published on The Explore Zone.

Leave a Comment Cancel Reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Attention! Your ePaper is waiting for publication!

By publishing your document, the content will be optimally indexed by Google via AI and sorted into the right category for over 500 million ePaper readers on YUMPU.

This will ensure high visibility and many readers!

Your ePaper is now published and live on YUMPU!

You can find your publication here:

Share your interactive ePaper on all platforms and on your website with our embed function

SEVENTH_EDITION_Operations_Management_in

• manufacturing

You also want an ePaper? Increase the reach of your titles

YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.

• Recommendations

Case Study Best Homes, Inc.: ForecastingexcelBest Homes is a new home construction company withheadquarters in Kansas City, Missouri. They constructonly residential homes throughout the U.S. and only newhomes. Having started on the East coast in 1945 theyexpanded to the Midwest and ultimately to the West coastand the South. They build all types of residential newhomes from low-end prices to the high-end of the market.Best Homes was a private company until 1958 whenit made its first public offering. While the companystarted small, it has expanded to become one of thelargest homebuilders in America. In 2015 Best Homesbuilt 20,040 new homes with revenue of $6.4 billion insales. Their sales were 4.0 percent of the national homemarket of over 501,000 new homes. 1COMPANY STRATEGY AND PLANNING CYCLEBest Homes competes based on its excellent brand reputation.Their reputation is earned by building qualityhomes at a competitive price. The cost per square footof their homes is comparable to competitors, but thedesign and interior finish of their homes is outstanding.This provides an advantage that competitors find hardto meet.The operations and supply chain strategy is organizedaround having sufficient capacity to build homeson schedule with the quality required to provide outstandingdesigns and interior finishes. As a result, theyhire only the best carpenters to do the work that willshow after the building is completed, including installationof the interior walls, flooring, windows, siding,cabinets, and woodwork to provide a beautiful home.For other parts of the construction that do not showupon completion, they hire some part-time or contractworkers to do the foundations, rough-in walls, roofing,wiring and plumbing. In each of these areas, however,they employ at least 60 percent full-time workers. Allnew employees, part-time or contract workers areassigned to a full-time employee to insure training andquality control of the work for the first six months. Thehiring of contract and part-time workers helps BestHomes deal with fluctuating monthly demand for homesduring the year. It also helps them control their costs.Demand or sales planning is done once a year andthen updated each month. The planning cycle for annualdemand includes two elements. First a forecast is madeby month for the next year of new home sales. This isdone using data from the past five years by month, shown1The data in this case are representative of a portion of thenational sales data for new homes derived from https://www.census.gov/construction/nrs/historical_data/index.html. 2016.EXHIBIT 1 New residential houses sold.2011 2012 2013 2014 2015Jan 840 920 1,280 1,320 1,560Feb 880 1,200 1,440 1,400 1,800Mar 1,120 1,360 1,640 1,560 1,840Apr 1,200 1,360 1,720 1,560 1,920May 1,120 1,400 1,600 1,720 1,880June 1,120 1,360 1,720 1,520 1,760July 1,080 1,320 1,320 1,400 1,720Aug 1,000 1,240 1,240 1,440 1,640Sept 960 1,200 1,240 1,480 1,400Oct 1,000 1,160 1,440 1,520 1,560Nov 920 1,120 1,280 1,240 1,440Dec 960 1,120 1,240 1,400 1,520Total 12,200 14,760 17,160 17,560 20,040in Exhibit 1. Another input to the forecasting processcomes from the sales force in each region of the country.The sales force input is combined with the forecast frompast sales data to come up with a final national sales forecastfor the company for the next year by month.The entire company uses the Best Homes final forecast.Financing uses it to forecast overall revenue of thecompany, to prepare estimates for income and balancesheet projections, along with quarterly earnings estimates.Marketing uses the monthly forecasts to plansales projections, hiring plans, sales incentives and salesgoals. Operations and Supply Chain uses the forecastsfor its Sales and Operations Planning (S&OP) planningprocess. S&OP is done for the annual forecast and thenupdated monthly to make adjustments in the sales forecastsand the resulting hiring plans for new employees,contract employees, and part-time employees, alongwith any layoffs that might be anticipated. The S&OP processeach month starts with an updated rolling forecastfor each of the next 12 months. The hiring plans andhome building starts are then set for the next month andplanned for the next three months. The plan also includespurchasing plans for materials used to construct thehouses. The monthly update can require adjustments toboth capacity and inventory of new homes. All functionsparticipate in the S&OP process including, Finance, Marketing,Sales, Operations, and HR.FORECASTING DEMANDDemand forecasting has been difficult due to the seasonaland trend variations. This is why the forecast and associatedplanning activities are updated monthly and projectedfor the next twelve months. Insufficient capacity orThis case was prepared by Roger G. Schroeder for class discussion. Copyright © by Roger G. Schroeder, 2016. All rights arereserved. Reprinted with permission.447

448 Part Seven Case Studiesinventory can have a dramatic effect on sales and profits.Either too much capacity or too little is a problem alongwith too little or too many homes in inventory.The first part of the planning process is to forecastdemand for new homes on a monthly basis. To accomplishthis data in Exhibit 1 is provided. It shows the numberof new single-family houses built in each month byBest Homes. The task is to forecast this data forward forthe year of 2016 by month.It is not enough to only forecast the average monthlydemand going forward. Actual demand can be significantlyhigher or lower than the average. As a result, thestandard deviation of demand, or mean absolute deviation,must also be forecasted. The monthly productionlevel for new homes is then set at the average demandplus a safety stock of new homes for when the demandexceeds the average. Since there is a three-monthlead-time for building new homes, any inventory andproduction levels must anticipate the three-month leadtime.This illustrates how critical forecasting is for bothpurposes of planning production levels and inventory.Discussion Questions1. What forecasting methods should the companyconsider? Please justify.2. Use the classical decomposition method to forecastaverage demand for 2016 by month. What is yourforecast of monthly average demand for 2016?3. Best Homes is also collecting sales projections fromeach of its regions for 2016. What role should theseadditional sales projections play, along with theforecast from question 2, in determining the finalnational forecast?

SEVENTH EDITIONOperations Managemen

The McGraw-Hill Education Series Op

OPERATIONS MANAGEMENT IN THE SUPPLY

About the AuthorsRoger G. Schroeder

viiiPrefaceThis book is ideal for r

xPrefaceExcel Spreadsheets. Twenty

xiiPrefaceassignment, the grade for

®Required=Results©Getty Images/iS

Brief Table of ContentsAbout the Au

xviiiContents4.9 Cross-Functional D

xxContents14.4 Independent versus D

PartiIntroduction1. The Operations

Chapter 1 The Operations Function 3

Chapter 1 The Operations Function 5

Chapter 1 The Operations Function 7

Chapter 1 The Operations Function 9

Chapter 1 The Operations Function 1

Chapter 2 Operations and Supply Cha

Walmart has distinctivecompetencies

Chapter 3 Product Design 37Operatio

Chapter 3 Product Design 39ProductD

Chapter 3 Product Design 41FIGURE 3

Chapter 3 Product Design 43Operatio

Chapter 3 Product Design 45Engineer

Chapter 3 Product Design 473.6 MODU

Chapter 3 Product Design 49Key Term

4c h a p t e rProcess SelectionLEAR

54 Part Two Process DesignFIGURE 4.

56 Part Two Process DesignBatch ope

58 Part Two Process Designconstruct

60 Part Two Process DesignOperation

62 Part Two Process Designrequires

64 Part Two Process Design4.5 FOCUS

66 Part Two Process Designit in as

68 Part Two Process Design3D printe

70 Part Two Process Designhire, tra

72 Part Two Process DesignDiscussio

74 Part Two Process DesignOperation

76 Part Two Process Designsubway id

78 Part Two Process DesignFIGURE 5.

80 Part Two Process Design5.4 CUSTO

82 Part Two Process DesignAirline s

84 Part Two Process DesignFedEx or

86 Part Two Process DesignOffshorin

88 Part Two Process Designothers ab

90 Part Two Process Design∙ Servi

6c h a p t e rProcess-Flow Analysis

94 Part Two Process Design6.2 THE P

96 Part Two Process DesignFIGURE 6.

98 Part Two Process Design1. Identi

100 Part Two Process Designoperatio

102 Part Two Process Designwaiting

104 Part Two Process DesignThe oven

106 Part Two Process DesignOperatio

108 Part Two Process Design∙ Proc

110 Part Two Process DesignThe reso

112 Part Two Process Design8. Revie

114 Part Two Process Design7.1 EVOL

116 Part Two Process DesignTABLE 7.

118 Part Two Process Designrepresen

120 Part Two Process DesignOperatio

122 Part Two Process Designkanbans

124 Part Two Process DesignA comple

126 Part Two Process DesignFIGURE 7

128 Part Two Process Designproducti

130 Part Two Process DesignTABLE 7.

132 Part Two Process Design7.11 KEY

134 Part Two Process DesignWork Cen

PartiiiQuality8. Managing Quality9.

Chapter 8 Managing Quality 139Opera

Chapter 8 Managing Quality 141Avail

Chapter 8 Managing Quality 143FIGUR

Chapter 8 Managing Quality 1458.5 M

Chapter 8 Managing Quality 147Opera

Chapter 8 Managing Quality 149TABLE

Chapter 8 Managing Quality 151TABLE

Chapter 8 Managing Quality 153Opera

Chapter 8 Managing Quality 155TABLE

Chapter 8 Managing Quality 157examp

9c h a p t e rQuality Control andIm

Chapter 9 Quality Control and Impro

10c h a p t e rForecastingLEARNING

188 Part Four Capacity and Scheduli

190 Part Four Capacity and Scheduli

192 Part Four Capacity and Scheduli

194 Part Four Capacity and Scheduli

196 Part Four Capacity and Scheduli

198 Part Four Capacity and Scheduli

200 Part Four Capacity and Scheduli

202 Part Four Capacity and Scheduli

204 Part Four Capacity and Scheduli

206 Part Four Capacity and Scheduli

208 Part Four Capacity and Scheduli

210 Part Four Capacity and Scheduli

212 Part Four Capacity and Scheduli

214 Part Four Capacity and Scheduli

11c h a p t e rCapacity PlanningLEA

218 Part Four Capacity and Scheduli

220 Part Four Capacity and Scheduli

222 Part Four Capacity and Scheduli

224 Part Four Capacity and Scheduli

226 Part Four Capacity and Scheduli

228 Part Four Capacity and Scheduli

230 Part Four Capacity and Scheduli

232 Part Four Capacity and Scheduli

234 Part Four Capacity and Scheduli

236 Part Four Capacity and Scheduli

238 Part Four Capacity and Scheduli

240 Part Four Capacity and Scheduli

242 Part Four Capacity and Scheduli

244 Part Four Capacity and Scheduli

12c h a p t e rScheduling Operation

248 Part Four Capacity and Scheduli

250 Part Four Capacity and Scheduli

252 Part Four Capacity and Scheduli

254 Part Four Capacity and Scheduli

256 Part Four Capacity and Scheduli

258 Part Four Capacity and Scheduli

260 Part Four Capacity and Scheduli

262 Part Four Capacity and Scheduli

264 Part Four Capacity and Scheduli

266 Part Four Capacity and Scheduli

268 Part Four Capacity and Scheduli

270 Part Four Capacity and Scheduli

272 Part Four Capacity and Scheduli

274 Part Four Capacity and Scheduli

276 Part Four Capacity and Scheduli

278 Part Four Capacity and Scheduli

280 Part Four Capacity and Scheduli

282 Part Four Capacity and Scheduli

284 Part Four Capacity and Scheduli

14c h a p t e rIndependent DemandIn

288 Part Five InventoryFIGURE 14.2

290 Part Five InventoryOverall, it

292 Part Five InventoryFIGURE 14.4D

294 Part Five InventoryFIGURE 14.6R

296 Part Five InventoryWe referred

298 Part Five InventoryFIGURE 14.8P

300 Part Five InventoryThe economic

302 Part Five InventoryOperations L

304 Part Five Inventory14.8 USING P

306 Part Five InventoryOperations L

308 Part Five Inventory14.11 KEY PO

310 Part Five InventoryProblemSolut

312 Part Five InventoryProblemsFive

314 Part Five InventorySupplementS-

316 Part Five InventoryFIGURE S14.2

318 Part Five Inventory15.1 THE MRP

320 Part Five InventoryOperations L

322 Part Five InventoryFIGURE 15.2T

324 Part Five InventoryTABLE 15.3Ma

326 Part Five InventoryTABLE 15.4Ma

328 Part Five InventoryCapacityPlan

330 Part Five InventoryThe purpose

332 Part Five Inventorydollars-and-

334 Part Five Inventory15.8 KEY POI

336 Part Five InventorySolutiona. T

338 Part Five InventoryProblemsThre

340 Part Five Inventory8. A telepho

16c h a p t e rSupply ChainManageme

344 Part Six Supply Chain Decisions

346 Part Six Supply Chain Decisions

348 Part Six Supply Chain Decisions

350 Part Six Supply Chain Decisions

352 Part Six Supply Chain Decisions

354 Part Six Supply Chain Decisions

356 Part Six Supply Chain Decisions

358 Part Six Supply Chain Decisions

360 Part Six Supply Chain Decisions

362 Part Six Supply Chain Decisions

364 Part Six Supply Chain Decisions

366 Part Six Supply Chain Decisions

368 Part Six Supply Chain Decisions

370 Part Six Supply Chain Decisions

372 Part Six Supply Chain Decisions

374 Part Six Supply Chain Decisions

376 Part Six Supply Chain Decisions

378 Part Six Supply Chain Decisions

380 Part Six Supply Chain Decisions

382 Part Six Supply Chain Decisions

384 Part Six Supply Chain Decisions

18c h a p t e rGlobal LogisticsLEAR

388 Part Six Supply Chain Decisions

390 Part Six Supply Chain Decisions

392 Part Six Supply Chain Decisions

394 Part Six Supply Chain Decisions

• Page 419 and 420: 396 Part Six Supply Chain Decisions
• Page 421 and 422: 398 Part Six Supply Chain Decisions
• Page 423 and 424: 400 Part Six Supply Chain Decisions
• Page 425 and 426: 402 Part Six Supply Chain Decisions
• Page 427 and 428: 404 Part Six Supply Chain Decisions
• Page 429 and 430: 406 Part Six Supply Chain Decisions
• Page 432 and 433: Case StudiesPartviiIntroductionOper
• Page 434 and 435: Operations Strategy at BYD of China
• Page 436 and 437: Operations Strategy at BYD of China
• Page 438 and 439: Case Study Early Supplier Integrati
• Page 440 and 441: Case Study Eastern Gear, Inc.: Job
• Page 442 and 443: Eastern Gear, Inc.: Job Shop 419EXH
• Page 444 and 445: Sage Hill Inn Above Onion Creek: Fo
• Page 446 and 447: Sage Hill Inn Above Onion Creek: Fo
• Page 448 and 449: U.S. Stroller: Lean 425EXHIBIT 1 U.
• Page 450 and 451: U.S. Stroller: Lean 427EXHIBIT 6 Ec
• Page 452 and 453: U.S. Stroller: Lean 429Many of the
• Page 454 and 455: The Westerville Physician Practice:
• Page 456 and 457: Case Study Journey to Perfect: Mayo
• Page 458 and 459: Journey to Perfect: Mayo Clinic and
• Page 460 and 461: Journey to Perfect: Mayo Clinic and
• Page 462 and 463: Case Study Toledo Custom Manufactur
• Page 464 and 465: Case Study The Evolution of Lean Si
• Page 466 and 467: The Evolution of Lean Six Sigma at
• Page 468 and 469: The Evolution of Lean Six Sigma at
• Page 472 and 473: Case Study Polaris Industries Inc.:
• Page 474 and 475: Polaris Industries Inc.: Global Pla
• Page 476 and 477: Polaris Industries Inc.: Global Pla
• Page 478 and 479: Lawn King, Inc.: Sales and Operatio
• Page 480 and 481: Lawn King, Inc.: Sales and Operatio
• Page 482 and 483: Consolidated Electric: Inventory Co
• Page 484 and 485: Consolidated Electric: Inventory Co
• Page 486 and 487: Case Study Southern Toro Distributo
• Page 488 and 489: Southern Toro Distributor, Inc. 465
• Page 490 and 491: Southern Toro Distributor, Inc. 467
• Page 492 and 493: Southern Toro Distributor, Inc. 469
• Page 494 and 495: ToysPlus, Inc.: MRP 471EXHIBIT 2 Fi
• Page 496 and 497: ToysPlus, Inc.: MRP 473carry invent
• Page 498 and 499: Altimus Brands: Managing Procuremen
• Page 500 and 501: Case Study Murphy Warehouse Company
• Page 502 and 503: Murphy Warehouse Company: Sustainab
• Page 504 and 505: Case Study Shelterbox: A Decade of
• Page 506 and 507: Shelterbox: A Decade of Disaster Re
• Page 508 and 509: AappendixAreas Under the StandardNo
• Page 510 and 511: IndexAABC analysis, 307MRP system a
• Page 512 and 513: Index 489Collaborative planning, fo
• Page 514 and 515: Index 491Exponential smoothing, 194
• Page 516 and 517: Index 493Kanban system, 121, 122, 1
• Page 518 and 519: Index 495Operations strategic decis

Index 497Quality planning, 142Quali

Index 499mitigation framework, 359o

ACRONYMS IN OPERATIONS AND SUPPLY C

Extended embed settings

Inappropriate

You have already flagged this document. Thank you, for helping us keep this platform clean. The editors will have a look at it as soon as possible.

Mail this publication

Delete template.

Are you sure you want to delete your template?

DOWNLOAD ePAPER

This ePaper is currently not available for download. You can find similar magazines on this topic below under ‘Recommendations’.

Save as template?

• Help & Support
• tuxbrain.com
• ooomacros.org
• nubuntu.org
• Terms of service
• Privacy policy
• Cookie policy
• Cookie settings

Choose your language

Main languages

Further languages

• Bahasa Indonesia

Performing this action will revert the following features to their default settings:

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!

Pardon Our Interruption

As you were browsing something about your browser made us think you were a bot. There are a few reasons this might happen:

• You've disabled JavaScript in your web browser.
• You're a power user moving through this website with super-human speed.
• You've disabled cookies in your web browser.
• A third-party browser plugin, such as Ghostery or NoScript, is preventing JavaScript from running. Additional information is available in this support article .

To regain access, please make sure that cookies and JavaScript are enabled before reloading the page.

• +1 862 207 3288
• [email protected]

Best Homes, Inc.: Forecasting Assignment

Best Homes, Inc.: Forecasting

Unit VI Case Study (material attached)

For this assignment, read the case study, “Best Homes, Inc.: Forecasting” on pages 447 – 448 of your textbook. Once you have read and reviewed the case scenario, respond to the following questions with thorough explanations and well-supported rationale:

• What forecasting methods should the company consider? Please justify.
• Use the classical decomposition method to forecast average demand for 2016 by month. What is your forecast of monthly average demand for 2016?
• Best Homes is also collecting sales projections from each of its regions for 2016. What role should these additional sales projections play, along with the forecast from question 2, in determining the final national forecast?

Your response must be a minimum of three -two pages, and APA style must be followed when writing your response. References must include your textbook plus a minimum of one additional credible reference. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying in-text citations.

Information about accessing the Blackboard Grading Rubric for this assignment is provided below.

We can write this or a similar paper for you! Simply fill the order form !

Unlike most other websites we deliver what we promise;

• Our Support Staff are online 24/7
• Our Writers are available 24/7
• Most Urgent order is delivered with 6 Hrs
• 100% Original Assignment Plagiarism report can be sent to you upon request.

GET 15 % DISCOUNT TODAY use the discount code PAPER15 at the order form.

Provide details on what you need help with along with a budget and time limit. Questions are posted anonymously and can be made 100% private.

Studypool matches you to the best tutor to help you with your question. Our tutors are highly qualified and vetted.

Your matched tutor provides personalized help according to your question details. Payment is made only after you have completed your 1-on-1 session and are satisfied with your session.

MGT311 SEU Case study Best homes inc. forecasting

User Generated

Business Finance

MGT311 Marketing Management

Saudi electronic university

Description

I have two copies of an assignment use it and copy the solutions from both files but make it a little different in your way and your own words if you use internet put resources pl

Unformatted Attachment Preview

Explanation & Answer

Attached. College of Business Administration MGT311- Marketing Management Assignment-3 Course Code : MGT 311 Student’s Name: Academic Year: 1439/1440 H Students ID Number: Semester: 2 nd Students Grade: CRN: Level of Mark : LO. Understand the concept of process selection, forecasting, capacity planning, and production forecast methods and schedule operations (LO 1.2 & 1.3) Case study: Best homes, Inc. forecasting Actions: 1- Read the case study entitled “Best homes Inc. forecasting” from the textbook (e-boo...

24/7 Study Help

Stuck on a study question? Our verified tutors can answer all questions, from basic  math  to advanced rocket science !

Similar Content

Related tags.

dynamic performance annotated bibliography food preparation case study management theory ESCI management law apple products delivery systems swot analysis physics problems

by Franz Kafka

Killers of the Flower Moon

by David Grann

The Da Vinci Code

by Dan Brown

Enders Game

by E. M. Forster

by Wiliam Shakespeare

The Tipping Point

by Malcolm Gladwell

Gone with the Wind

by Margaret Mitchell

The English Patient

by Michael Ondaatje

Bridge to Terabithia

by Katherine Paterson

working on a study question?

Studypool is powered by Microtutoring TM

Copyright © 2024. Studypool Inc.

Studypool is not sponsored or endorsed by any college or university.

Ongoing Conversations

Access over 35 million study documents through the notebank

Get on-demand Q&A study help from verified tutors

Read 1000s of rich book guides covering popular titles

Sign up with Google

Sign up with Facebook

Already have an account? Login

Login with Google

Login with Facebook

Don't have an account? Sign Up

• High School

Case Study Best Homes, Inc.; Forecasting Best Homes is a new home construction company with headquarters in Kansas City, Missouri. They construct only residential homes throughout the U.S. and only new homes. Having started on the East coast in 1945 they expanded to the Midwest and ultimately to the West coast and the South. They build all types of residential new homes from low-end prices to the high-end of the market. Best Homes was a private company until 1958 when it made its first public offering. While the company started small, it has expanded to become one of the largest homebuilders in America. In 2015 Best Homes built 20,040 new homes with revenue of $6.4 billion in salles. Their sales were 4.0 percent of the national home market of over 501,000 new homes. 1 COMPANY STRATEGY AND PLANNING CYCLE Best Homes competes based on its excellent brand reputation. Their reputation is earned by building quality homes at a competitive price. The cost per square foot of their homes is comparable to competitors, but the design and interior finish of their homes is outstanding. This provides an advantage that competitors find hard to meet, The operations and supply chain strategy is organized around having sufficient capacity to build homes cast. on schedule with the quality required to provide out- comp standing designs and interior finishes. As a result, they shee hire only the best carpenters to do the work that will mate show after the building is completed, including installation of the interior walls, flooring, windows, siding, goals cabinets, and woodwork to provide a beautiful home. For other parts of the construction that do not show upon completion, they hire some part-time or contract workers to do the foundations, rough-in walls, roofing. wiring and plumbing. In each of these areas, however, they employ at least 60 percent full-time workers. All new employees, part-time or contract workers are cess assigned to a full-time employee to insure training and quality control of the work for the first six months. The hiring of contract and part-time workers helps Best Homes deal with fluctuating monthly demand for homes during the year. It also helps them control their costs. Demand or sales planning is done once a year and then updated each month. The planning cycle for annual demand includes two elements. First a forecast is made by month for the next year of new home sales. This is done using data from the past five years by month, shown 1The data in this case are representative of a portion of the national sales data for new homes derived from https://www. ated census.gov/construction/mrs/historical_data/index.html 2016. jecter This case was prepared by Roger G. Schroeder for class discussion. Copy inventory can have a dramatic effect on sales and profits. lead-time for building new homes, any inventory and Either too much capacity or too little is a problem along production levels must anticipate the three-month leadwith too little or too many homes in inventory. time. This illustrates how critical forecasting is for both The first part of the planning process is to forecast purposes of planning production levels and inventory. demand for new homes on a monthly basis. To accomplish this data in Exhibit 1 is provided. It shows the number of new single-family houses built in each month by Discussion Questions Best Homes. The task is to forecast this data forward for 1. What forecasting methods should the company the year of 2016 by month. consider? Please justify. It is not enough to only forecast the average monthly 2. Use the classical decomposition method to forecast demand going forward. Actual demand can be signifiaverage demand for 2016 by month. What is your cantly higher or lower than the average. As a result, the forecast of monthly average demand for 2016 ? standard deviation of demand, or mean absolute devia- 3. Best Homes is also collecting sales projections from tion, must also be forecasted. The monthly production each of its regions for 2016. What role should these level for new homes is then set at the average demand additional sales projections play, along with the plus a safety stock of new homes for when the demand forecast from question 2 , in determining the final exceeds the average. Since there is a three-month national forecast?

Scuddyg7124 is waiting for your help., expert-verified answer.

• 24.9K answers
• 19M people helped

Best Homes should consider using multiple forecasting methods, such as time series forecasting, regression analysis, market research , and expert judgment, to forecast the demand for new homes in 2016.

1. Time series forecasting: This method involves analyzing historical data to identify patterns and trends that can be used to predict future demand. Best Homes can use time series forecasting techniques such as moving averages or exponential smoothing to forecast the average monthly demand for new homes in 2016. 2. Regression analysis : Regression analysis can be used to identify relationships between demand for new homes and other factors such as economic indicators, population growth, or interest rates. By analyzing these relationships, Best Homes can make more accurate forecasts. 3. Market research and surveys : Best Homes can conduct market research and surveys to gather information on factors that influence the demand for new homes, such as customer preferences, income levels, or demographic trends. 4. Expert judgment: Best Homes can also seek input from experts in the industry, such as real estate analysts or economists, to obtain their insights and opinions on the future demand for new homes. Expert judgment can help validate and refine the forecasts generated by other methods. Learn more about market research

brainly.com/question/30651551

Still have questions?

Get more answers for free, you might be interested in, new questions in business.

More From Forbes

Master-planned communities are thriving and growing in florida.

• Share to Facebook
• Share to Twitter
• Share to Linkedin

Completed (foreground) and under-development (background) sections of the new Sunbridge community in ... [+] Central Florida, near Lake Nona

Florida has become a hotbed for the development of master-planned communities (”MPCs”), with real estate developers capitalizing on a confluence of market forces that make these projects increasingly attractive. In our work, we are seeing a large number of new communities of this type now in planning or in development, all around the state of Florida.

Florida's population is growing rapidly, particularly with the movement of many companies from the northeast to this region, generating local jobs, supplemented of course by the steady influx of retirees, remote workers, and international migration. The U.S. Census Bureau reported that Florida's population grew by more than 14% between 2010 and 2020, and this trend continues as more people seek the state's favorable climate, no state income tax, and relatively lower cost of living compared to other major states like California and New York. In addition to the working families, retirees moving in from other states looking for planned environments with access to healthcare, social amenities, and outdoor activities are another source of demand for homes in master-planned communities.

Sales paces in general have been slower this year than last year, but now that mortgage rates have fallen from the high 7s to close to 6%, monthly payments will be in reach for more potential buyers, and builders are already feeling more confident. The outlook is extremely positive for Florida MPCs, given the robust migration into Florida and the high rates of household formation both in the state and nationally.

Demand for Integrated, Amenity-Rich Living

Master-planned communities are designed to meet the demands of home buyers who want a lifestyle that is supported by amenities such as golf courses, fitness centers, restaurants, and schools within the development. These features create a sense of community and convenience, especially appealing to young families, active retirees, and remote workers.

For developers, this trend presents an opportunity to offer a “one-stop” living solution. By integrating residential, commercial, and recreational spaces into a single cohesive environment, MPCs meet the growing demand for work-life balance and convenience. The appeal of "live, work, play" communities has become a major selling point, differentiating MPCs from stand-alone suburban developments.

Ukrainian Drones Just Blew Up 2,000 Tons Of Ammo in Southern Russia

The ‘future of humanity’—elon musk reveals details of secret meeting with el salvador’s bitcoin president amid price rally, today’s nyt mini crossword clues and answers for saturday, september 21, affordable housing and diverse price points.

Florida MPCs often offer a range of housing options that cater to various income levels. These developments frequently include single-family homes, townhouses, apartments, and built-to-rent neighborhoods, making them accessible to a broader demographic. Affordability is key, particularly in light of recent inflation and higher interest rates that are challenging many potential buyers.

By providing diverse price points, these communities attract a wide range of residents, from first-time homebuyers to empty nesters. Furthermore, Florida developers often benefit from lower land costs in more rural areas, allowing them to build with a wider variety of housing styles and sizes, which creates more attractive price points for consumers.

Infrastructure and Developer Incentives

Local governments in Florida, especially in suburban and exurban areas, are increasingly offering incentives to developers of master-planned communities. These can include tax breaks, expedited permitting processes, and public-private partnerships to build the necessary infrastructure such as roads, utilities, and public transportation. By offering these incentives, governments are able to promote economic development and attract new residents, which in turn boosts the local tax base.

Case Study: Lakewood Ranch

Lakewood Ranch is the highest-volume all-ages MPC in the country, straddling Manatee and Sarasota Counties. The developer of that community, Schroeder-Manatee Ranch, said builders see master planned communities, especially those with a proven track

Lakewood Ranch walking path

record, as being able to provide reliable performance. Buyers are also gravitating to MPCs as they prioritize lifestyle, quality and look for assurances of their investment, particularly in a more challenging market. Builders naturally want to be where their customers favor.

Resale homes in Lakewood Ranch have a median sale price that is 50% above the MSA’s median price (as of July 2024 for YTD through June). New construction homes in Lakewood Ranch have a premium of 30%+ compared to new homes in nearby communities.

Lakewood Ranch is a multi-generational community that offers a diverse range of village amenities, home types and price points that appeal to a variety of demographics, including professionals, families, and retirees.

So far this year, 25% of sales were in entry-level villages, 49% in move-up buyer / multi-generational villages, 14% in active-adult targeted villages, and 12% in luxury / custom villages. The median age of Lakewood Ranch residents is 53, which is half a year younger than the overall Sarasota market.

• For 2024, approximately 84% of sales YTD were single-family homes, 11% were townhomes, and 5% were attached villas
• In the past year, four apartment rental communities have opened, bringing 1,220 units to market

Lakewood Ranch's Emerald Landing Amenity Center Grand Opening. Many units shown here are still under ... [+] construction at the time the photo was taken

The typical builder sells 11 homes per month in Lakewood Ranch, but the range goes from 1-2 homes per month in the luxury end up to 35 per month from national production homebuilders who are active there.

Lakewood Ranch’s builders have consistently outperformed in Lakewood Ranch compared to other nearby communities. MPCs represent quality and offer assurances of investment due to additional layers of services offered.

Case Study: Sunbridge and Lake Nona

Sunbridge, being developed by Tavistock, is located near the prestigious and extraordinarily successful Lake Nona Community in the greater Orlando market. Both Sunbridge and Lake Nona are being developed by Tavistock Development Company.

Lake Nona has consistently been ranked in RCLCO’s Top MPC list, with Sunbridge making the list in their year-end 2023 list.

The premium for homes within an MPC such as Lake Nona and Sunbridge can vary significantly depending on the region and the specific characteristics of the community; however, our experience has consistently shown that homes in an MPC can command at least a 15% premium compared to similar new home offerings in the area reflected in the added value from enhanced community amenities to a higher standard of living.

From a Lake Nona 2022 resident survey (683 participants):

· 52% of residents are female and 47% are male.

· 32% of residents surveyed are 35-44 years old.

· Nearly 80% of residents surveyed are married.

Homes in one neighborhood of Sunbridge

· More than 85% of residents have a college degree,

· More than 40% of residents surveyed completed graduate school.

· More than 35% of residents surveyed have a household income of more than $250K.

Builders within Sunbridge sold 387 homes last year, up from 244 the year before (the development started in 2020, and has sold 1,027 since opening. Lake Nona, which has been selling for much longer, has sold 2,095 over the same period, and was running at a pace of 500 per year back in 2015.

A builder’s sales pace can vary based on the types of homes available and the pricing strategy employed. On average, builders in Sunbridge are averaging 32 sales per month.

Demand from builders for additional lots within Tavistock’s communities is strong, as there is a tight supply of lots in the entire Central Florida market. Additionally, for home builders, MPCs tend to be more resilient during economic downturns. This resilience is largely due to the value and quality that MPCs offer. Buyers, even in uncertain economic times, are inclined to invest in a community that promises stability, superior amenities, and a well-maintained environment. The comprehensive planning and long-term vision that goes into MPCs create a sense of security and confidence among buyers, making these communities a safer investment during economic fluctuations. Furthermore, the diverse mix of housing options and community features can cater to a broader range of buyers.

We continue to track existing and planned MPCs throughout the State of Florida. Thousands of new homes are planned over the next five years in St. Lucie, Brevard, and Martin Counties on the east coast, and thousands more on the Gulf coast, as well as in Central Florida and in the Jacksonville area. Other high-volume MPCs in Florida include Wellen Park, Silverleaf, Tradition, Babcock Ranch, Ave Maria, Westlake, and Viera, each building and selling hundreds of homes each year.

• Editorial Standards
• Forbes Accolades

Join The Conversation

One Community. Many Voices. Create a free account to share your thoughts. 

Forbes Community Guidelines

Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.

In order to do so, please follow the posting rules in our site's  Terms of Service.   We've summarized some of those key rules below. Simply put, keep it civil.

Your post will be rejected if we notice that it seems to contain:

• False or intentionally out-of-context or misleading information
• Insults, profanity, incoherent, obscene or inflammatory language or threats of any kind
• Attacks on the identity of other commenters or the article's author
• Content that otherwise violates our site's  terms.

User accounts will be blocked if we notice or believe that users are engaged in:

• Continuous attempts to re-post comments that have been previously moderated/rejected
• Racist, sexist, homophobic or other discriminatory comments
• Attempts or tactics that put the site security at risk
• Actions that otherwise violate our site's  terms.

So, how can you be a power user?

• Stay on topic and share your insights
• Feel free to be clear and thoughtful to get your point across
• ‘Like’ or ‘Dislike’ to show your point of view.
• Protect your community.
• Use the report tool to alert us when someone breaks the rules.

Thanks for reading our community guidelines. Please read the full list of posting rules found in our site's  Terms of Service.

• For educators
• English (US)
• English (India)
• English (UK)
• Greek Alphabet

This problem has been solved!

You'll get a detailed solution that helps you learn core concepts.

Question: You read the case study Best Homes, Inc. about forecasting. In the case, it is shared that the entire company uses Best Homes forecast. Please use the operational categories of supply chain management from Prater & Whitehead 2023 to describe how using this forecast in the Project Management department might affect the company. How does supply chain

The operational categories of supply chain manage...

Not the question you’re looking for?

Post any question and get expert help quickly.