Question

b) In your opinion, which one is most critical in a retail sales environment and why? (3.5 marks) Q 2 (10 marks) A car parts manufacturer has had monthly sales for a five-month period as follows: Sales (000 units) Month January February March April May Forecast June's sales volume, using cach of the following: i. A four-month moving average (2 Marks) ii. Exponential smooth with a smoothing constant of 0.10, assuming a February forecast of 19(000). (2 Marks) iii. The naive approach (2 Mark) iv. A weighted average using 0.50 for May, 0.30 for April, and 0.20 for March (2 Marks) V. Which method seems least appropriate? Why? (2 Marks) Hint: Refer to Week#4: Topic 3 Demand Forecasting Day 1 Slides for reference to the formula and steps on calculating. See attached Recommended Formula Sheet

Answer 1

Month Demand January 19 February 18 March 15 | April 20 May 18 (Feb Mar April May) 4 I. Forecast for June + Forecast (18+ 15 + 20 + 18) 4 17.75 II. Exponential Smoothing Alpha 0.1 st *(1 - 0.1) Forecast yt * 0.1 Where yt previous actual demand St previous forecast Forecast Month February 19 19 Forecast (19 * 0.1) (19 * (1 -0.1)) 18.9 Forecast = (18 * 0.1) + (19 * (1 -0.1)) 18.51 Forecast (15 * 0.1) + (18.9 * (1 -0.1)) 18.659 Forecast (20 * 0.1)18.51 * (1 -0.1) March April May June III. Naive approach Forecast using naive approach is the actual demand of previous period Forecast for June 18 = IV. Weighted Average (March 0.2)(April * 0.3) May * 0.5) June (15 0.2) (20 0.3)(18 * 0.5) 3 6+ 9 = 18 Forecast for June =

Do give a positive rating if you think this answer helped