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Case Study 1. Co.PL Manufacturing makes many components for print machines and copy machines. The company makes 20 different items. The company do not have forecast for production planning. That’s why the manager decides which items to produce and the batch size, based on orders and the amounts in inventory. The products with fewest inventory are given the highest priority. And since that the demand is somewhat erratic the company has experienced being overstocked on some items and out of others. Because of the falling profits because of overstocked and uneven inventories, the manager wants to start forecasting for product A which has a larger share of the company’s profit. The manager gathers the historical sales of this product for previous 14 weeks.   Week 1 Product A 1 50 2 54 3 57 4 60 5 64 6 67 7 90* 8 76 9 79 10 82 11 85 12 87 13 92 14 96   Questions: What are the advantages of using forecasting models?? Think of the best forecasting methods appropriate for product A. (hint: 7th week is considered as outlier. A simple way to replace the outlier is to get the average of the previous week and the next week in time-series)

Case Study 1. Co.PL Manufacturing makes many components for print machines and copy machines. The company makes 20 different items. The company do not have forecast for production planning. That’s why the manager decides which items to produce and the batch size, based on orders and the amounts in inventory. The products with fewest inventory are given the highest priority. And since that the demand is somewhat erratic the company has experienced being overstocked on some items and out of others. Because of the falling profits because of overstocked and uneven inventories, the manager wants to start forecasting for product A which has a larger share of the company’s profit. The manager gathers the historical sales of this product for previous 14 weeks.   Week 1 Product A 1 50 2 54 3 57 4 60 5 64 6 67 7 90* 8 76 9 79 10 82 11 85 12 87 13 92 14 96   Questions: What are the advantages of using forecasting models?? Think of the best forecasting methods appropriate for product A. (hint: 7th week is considered as outlier. A simple way to replace the outlier is to get the average of the previous week and the next week in time-series)

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Case Study 1.

Co.PL Manufacturing makes many components for print machines and copy machines. The company makes 20 different items. The company do not have forecast for production planning. That’s why the manager decides which items to produce and the batch size, based on orders and the amounts in inventory. The products with fewest inventory are given the highest priority. And since that the demand is somewhat erratic the company has experienced being overstocked on some items and out of others. Because of the falling profits because of overstocked and uneven inventories, the manager wants to start forecasting for product A which has a larger share of the company’s profit. The manager gathers the historical sales of this product for previous 14 weeks.

 

Week 1

Product A

1

50

2

54

3

57

4

60

5

64

6

67

7

90*

8

76

9

79

10

82

11

85

12

87

13

92

14

96

 

Questions:

  1. What are the advantages of using forecasting models??
  2. Think of the best forecasting methods appropriate for product A. (hint: 7th week is considered as outlier. A simple way to replace the outlier is to get the average of the previous week and the next week in time-series)
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