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BC3406 Business Analytics Consulting

Semester 2, 2016-17

Paula’s Choice

Paula's Choice Skincare began with a commitment to customer advocacy and education,
and that remains as a core element of our philosophy and product development. Our
mission is to create skincare that keeps its promises and for products you can feel confident
about buying and using.

Paula's Choice provides customer education, consumer advocacy for industry truths and
transparency in its own products. All claims are backed by research Backed, formulated
fragrance and irritation free, and products are never tested on animals. We also have a
100% used product guarantee.

Paula's Choice is seeking evidence based business insights for the following reasons:

1. A need to provide better value to customers via smart marketing from data analytics;

2. Reducing operational costs to increase resources for further outreach;

3. Understand customer confusion about various products and product lines to provide
better education; and

4. Getting a better picture on how to meet customer needs by recommending products


5. Providing feedback for future product development.

1. Develop a marketing strategy to promote five combinations (or bundles or sets) of
products (represented by stock-keeping units); and

2. Identify the location of Paula’s Choice’s next physical store in Singapore.

© Dr. Damien Joseph, Nanyang Business School, Nanyang Technological University Page 1
Assumptions, Notes and Additional Requirements
1. Assume 50% margin on each stock-keeping unit (SKU).

2. A combination (or bundles or set):

a. Is made up of three (3) SKUs per bundle

b. Justifications for these combinations of SKUs may include quantitative and

qualitative reasons.

3. Forecast of units of SKUs to be sold

a. The channels for sales to consider are retail, online, and international

b. Paula’s Choice forecasts sales using the following windows: 6 months, 12

months, 18 months forward.

4. Identify SKUs that Paula’s Choice should discontinue.

5. Develop a stock (i.e. SKU) replenishment model for stock levels held at each of
these channels. This is the model to predict what inventory to hold at the 3 locations.
a. Channels to consider: Online, Store BC, and Store FP.

b. Assume:
i. Monthly Replenishment
ii. Single Trip
iii. No Space Constraints.

6. Develop a projected stock (SKU) model for forecasting stock to purchase from our
main head office each month
a. Assume a three (3) month lag time for delivery of orders. For example, orders
for April are locked in 31 January.

b. Constraints to consider include:

i. Maximum purchase order value is 50% of trailing three (3) months
sales moving average (3SMA) of retail sales.
ii. Minimum purchase quantity of each SKU
iii. Identify the top 10 products that require three times (i.e. 3x) the
stock level of 3SMA sales.

7. Store Positioning
a. Determine location of next store using customer addresses.

b. Teams may use Data.Gov datasets for better accuracy.

© Dr. Damien Joseph, Nanyang Business School, Nanyang Technological University Page 2
Data Hackathon Deliverables
The due date for submission of reports is: end of day (23:59 hrs NTULearn server
time) 26 Mar 2017

Each team will be required to undertake both parts of the challenge posed by Paula’s

Submit your team’s report, in pdf format, through the group level Assignments on NTULearn.
Label your submission in the following format: “BC3406TeamX.pdf”; where X represents the
team number as assigned.

The report should contain the following at the minimum:

1. A cover page that includes a title, names and matric numbers of the team.

2. A table of contents to the submission.

3. A 4-page executive summary of the objectives, analyses and business insights.

4. An Appendices containing:
a. A description of the data.
b. A description of the analytical technique(s) adopted.
c. Results of analyses and interpretations of the results supported by
appropriate tables, graphs or figures.

5. A presentation deck of not more than 5 slides summarizing

© Dr. Damien Joseph, Nanyang Business School, Nanyang Technological University Page 3