Forecasting Exercise - Do NOT use Excel Forecasting Exercise - Do NOT use Excel

Question

Forecasting Exercise - Do NOT use Excel

Forecasting Exercise - Do NOT use Excel

You are the supply chain manager for an electronics-manufacturing company. In this assignment, you will use the following data to obtain forecasts for your company through various forecasting techniques. Quarter Forecast Actual Demand 4Q 2008 200 220 1Q 2009 220 215 2Q 2009 215 210 3Q 2009 210 220 4Q 2009 220 225 1Q 2010 225 240 2Q 2010 240 255 3Q 2010 260 4Q 2010 270 1Q 2011 • (a) Using the three quarters moving average, find out the forecasts for 3Q 2010, 4Q 2010, and 1Q 2011. • (b) Compute the forecasts for 3Q 2010, 4Q 2010, and 1Q 2011 using exponential smoothing with a smoothing factor of 0.6. • (c) Compute the forecasts for all quarters of 2010 using the three quarter weighted moving average, with the most recent data weighted at 0.5, the second-most recent data weighted at 0.35, and the third-most recent data weighted at 0.15. • (d) Using the data provided in the above table, explain what forecasting techniques are being used for 2008 and the first two quarters of 2009. • (e) Computed the forecasting error using the exponential smoothing technique. • (f) Computed the forecasting error using the weighted smoothing average method. • (g) On the basis of your calculations, explain which technique provides the most accurate forecast for your company. Explain your answer with critical reasoning.

Explanation / Answer

Below Chart brings forth the method of calculating forecasting technique :

1. The three quarters moving average takes into account of average of first 3 period to find the forecasted of 4 period and so on.

Exponential Smoothing uses the formula to calculate forecasted of period : F2=F1+alpha*(A1-F1)

where F is forecasted A is Actual Demand and alpha is error which is 0.6

0.6 Quarter Forecast Actual Demand a.Three quarters moving average b. exponential smoothing =0.6 e.the forecasting error exponential smoothing technique Squared f.the forecasting error weighted smoothing average method Squared 4Q 2008 200 220 200 0 0 1Q 2009 220 215 212 -5 25 2Q 2009 215 210 209 -5 25 3Q 2009 210 220 215 206 10 100 5 25 4Q 2009 220 225 215 212 5 25 10 100 1Q 2010 225 240 218 215 15 225 22 469 2Q 2010 240 255 228 224 15 225 27 711 3Q 2010 260 240 233 260 67600 20 400 4Q 2010 270 252 389 270 72900 18 336 1Q 2011 262 551 0 0 -262 68469 MSE (Mean Standard Error) 14112.5 10073

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.