12.
1
149
250
166
565
188.33
Fri
Sat
Sun
total
average
1
0.79
1.33
0.88
Fri
Sat
Sun
2
154
255
162
571
190.33
3
152
260
171
583
194.33
4
150
268
173
591
197.00
5
159
273
176
608
202.67
6 total
163
927
276
1582
183
1031
622
3540
207.33
2
3
4
5
6 total
0.81 0.782161 0.761421 0.784539 0.786174 4.714553
1.34 1.337907 1.360406 1.347039 1.33119 8.043731
0.85 0.879931 0.878173 0.868421 0.882637 5.241716
a.
cmav for fri
sat
sun
0.79
1.34
0.87
0.78
1.35
0.87
0.78
1.35
0.88
0.78
1.35
0.88
b.
fri
sat
sun
seasonal relative
0.78
1.34
0.87
simple average
0.79
1.34
0.87
c. The minor difference comes from moving average and we are not counting all the averages here
however, if we take the simple average method, all the readings are considered.
16.a) If we look closely, the data consist of two outliners which will not give a clear pattern. Even though
there is an increasing trend due to the outliners it is better to use adjusted exponential smoothing
method.
b) Yes, this will cause concern because we will not be able to fulfill the actual demand for the pain relief.
c) Trend adjusted smoothing
ACTUAL
8
9
10
11
12
13
14
15
49
52
48
52
55
54
56
57
FORECAST (ADFD)^2
50
1.00
49.7
5.29
50.39
5.71
49.63
5.62
50.34
21.72
51.73
5.15
52.41
12.89
53.48
12.39
50 + .3(49 – 50) = 49.7
49.7 + .3(52 – 49.7) = 50.39
50.39 + .3(48 – 50.39) = 49.63
49.63 + .3(52 – 49.63) = 50.34
50.34 + .3(55 – 50.34) = 51.73
51.73 + .3(54 – 51.73) = 52.41
52.41 + .3(56 – 52.41) = 53.48
16
54.53
TOTAL
MSE
53.48 + .3(57-53.48) =54.53
69.77
69.77/7= ± 9.96
Case1
M&L Manufacturing case
1.A formalized approach will make the production planning for the computer easier and data can be
quantified to allow the correct number of inventories stored in the facility. If this method is not used,
personal biasness may be involved that will hinder the overall forecast.
When there is huge amount of data, forecasting cannot be done depending upon less formalized
method because an individual’s intuition will not be able to analyze huge set of data.
Since the company was facing frequent stock out a formalized approach of forecasting will help them to
conduct proper inventory management and control over stock levels, reduce uncertainty factors by a
considerable amount and fewer stock outs in retail stores.
2.PRODUCT 1
TOTAL
PERIOD
T
1
2
3
4
5
6
7
8
9
10
11
12
13
14
105
Product
1Y
50
54
57
60
64
67
71.5
76
79
82
85
87
92
96
1020.5
TY
T^2
50
108
171
240
320
402
500.5
608
711
820
935
1044
1196
1344
8449.5
1
4
9
16
25
36
49
64
81
100
121
144
169
196
1015
m= (14*8449.5)-(105*1020.5)/(14*1015)-(105*105) = 3.5
c= 1020.5-(3.5*105)/14 = 46.64
equation- Ft = 46.64 + 3.5t
F15= 46.64 + 3.5*15=99.14
F16= 46.64 + 3.5*16=102.64
F17= 46.64 + 3.5*17=106.14
F18= 46.64 + 3.5*18=109.64
Justification – For product 1 at period of 7 we can see there is a demand of 90 units and if we look at the
overall data there is an increasing trend which is the reason behind using trend equation method.
However, an unexceptional rise on period 7 which can be taken as an outliner since all the other values
are quite closer to each other. To remove this, we can take an average demand of the previous and the
next week’ data.so the demands becomes (67+76)/2= 71.5.
Product 2
For 15 exponential method44+ 0.5(44-43)=44.5
For 16 average method
(43+44+44.5)/3 = 43.8
For 17
(44+44.5+43.8)/3 = 44.1
For 18
(44.5+43.8+44)/3 = 44.06
Justification – for product 2 the data did not show any particular trend which is why exponential
smoothing method was used followed by average method.
Case2
Highline Financial Services, Ltd.
service
A
quarter
1
2
3
4
year 1
60
45
100
75
year 2
72
51
112
85
difference
12
6
12
10
service
B
quarter
1
2
year 1
95
85
year 2
85
-7
difference next forecast + difference
-10
75
-10
65
next forecast + difference
84
56
124
95
3
4
92
65
85
50
-7
-15
78
35
service
C
quarter
1
2
3
4
year 1
93
90
110
90
year 2
102
75
110
100
difference
9
-15
0
10
next forecast + difference
111
60
110
110
Justification- here the data is not showing either increasing or decreasing trend so a liner trend equation
cannot be used. There is an unexceptional rise in demand for both service A and B during third quarter
which can be taken as an outliner. Moreover, service C has genuine increase in demand and the values
are higher in comparison to A and B.
In the forecasted data for service B there was a decreasing trend which shows a concern about their
future performance, so the company has room for improvement. For C there was no general
improvement in the forecasted data which shows that the company needs to improve its service in
order to be better.