MGMT617 Assignment 1 Solution and Discussion


  • Cyberian's Gold

    PRODUCTION PLANNING & INVENTORY CONTROL (MGMT617) ASSIGNMENT # 1
    Due Date: November 27, 2019 SCENARIO:
    Marks: 10
    “Fashion Hub” a clothing company has a seasonal demand for a product line which is estimated quarterly. The demand, in SKUs (stock keeping units), for the past three years is given below:
    4f70c70a-eabf-4454-9e1b-d573609a8c93-image.png
    QUESTIONS:

    1. Your task is to help the company determine the quarterly forecast if the cumulative forecast for the year 2020 is 650 SKUs. (5)
    2. Using the same data, forecast the sales for the year 2020 through 4-period moving average method. (3)
    3. In your opinion, which method of forecasting, quarterly forecast or moving average, is better for Fashion Hub? Discuss with reasons. (2)
      Instructions:
      • You have to calculate forecasts and present these in tables
      • Write formulae and show necessary calculations
      • You may use MS Excel for calculations and copy-paste tables in your solution file (MS
      Word format)
      • For question 3, decide better technique and give arguments
      • Watch video lectures and consult book to complete the assignment

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  • Cyberian's Gold

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    3.Better Method of Forecasting:

    • The moving average method in this case is unable to take into account the seasonality of data provided as it can be seen that It takes the average of last four periods but does not consider the fact that the demand for the product is high in first quarter of each year. Moreover, it is unable to provide the complete forecasts for the rest of quarters except for Q1 of Year 2020, so the quarterly forecast method is suitable in this scenario.

  • Cyberian's Gold

    f0143911-7b44-4a6a-8885-dc6b84556ba5-image.png 5a3d81fb-bbdd-4178-bfb2-4dd800e0e363-image.png

    3f4f800e-52cc-46d5-9552-9a062a80ae9a-image.png

    3.Better Method of Forecasting:

    • The moving average method in this case is unable to take into account the seasonality of data provided as it can be seen that It takes the average of last four periods but does not consider the fact that the demand for the product is high in first quarter of each year. Moreover, it is unable to provide the complete forecasts for the rest of quarters except for Q1 of Year 2020, so the quarterly forecast method is suitable in this scenario.


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