Capacity and Demand Planning in Coca- Cola

Topics: Forecasting, Linear regression, Regression analysis Pages: 3 (678 words) Published: January 24, 2013
Profile of Coca-Cola Refreshments USA

Briefly describe the line of business (product types etc.), noting the type of environment (MTS, ATO or MTO).
Coca-Cola is an American multinational beverage corporation that was found on 1892 by Asa Candler and is a manufacturer, retailer and marketer of non-alcoholic beverage concentrates and syrups. Coca-Cola operate in a make- to -stock enviroment. This process can help to provide faster service to customers from available stock and lower costs considering Coke normally has a distribution process of bulk items. The customers buy directly from the available inventory. Demand management and distribution is therefore a fey focus.They use the continuous flow method of manufacturing. The products are made in a continuous fashion and tend to be highly standardized and automated with very high volumes of production. The production flow of Coca Cola involves passing sub-assemblies/parts from one stage of production to another in a regular flow.

• Briefly outline the forecastng technique(s) used by the company. Coca-Cola uses the forecasting technique of linear regression using a functional relationship between two or more correlated variables. The relationship is usually developed from observable data and plotted in a graph the two variables regress to form a straight line.The linear regression line is of the form Y=a+bX, where Y is the value of the dependent variable that we are solving for,a is the Y-intercept, b is the slope, and X is the independent variable( In the time series analysis, X is the units of time)This method is useful for long-term forecasting of major occurences and aggregate planning. The linear regression model is based on the relative increase in consumer sales, which is then translated with a separate retailer model into the sell-out sales forecast of Coca-Cola. The restrictions with this method is that past data and future projections are assumed to fall about a straight liner.Linear regression is...
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