Chapter 11.S, Problem 7P

Question

•• S11.7 Over the past 5 weeks, demand for wine at Winston’s Winery has been 1,000, 2,300, 3,200, 1,750, and 1,200 bottles. Winston has placed weekly orders for glass bottles of 1,100, 2,500, 4,000, 1,000, and 900 units. (Recall that the sample variance of a data set can be found by using the VAR S function in Excel or by plugging each x value of the data set into the formula: Variance = $\frac{{\displaystyle \sum {(x-x)}^2}}{(n-1)}$, where x is the mean of the data set and n is the number of values in the set.)

1. a. What is the variance of demand for Winston’s Winery?
2. b. What is the variance of orders from Winston’s Winery for glass bottles?
3. c. What is the bullwhip measure for glass bottles for Winston's Winery?
4. d. Is Winston’s Winery providing an amplifying or smoothing effect?