a) Calculate measures of forecast accuracy (MFE, MAD and MAPE) using the data from FY2018 and FY2019 for both forecasting methods. Do these forecasts seem adequate for the purposes of decision making?Why or why not?
b) Develop a forecast for FY2020 using the two forecasting methods currently employed by the company. (ROUND UP to the next whole number)Comment on which of the forecasts is likely to be more appropriateto support decisions based on your assessment of forecast accuracy from Q1.Based upon this, identify which forecast method that you will use going forward with the project.
The company provides you with the following information for the past two scal years: _ml Annual demand, units Averae weekl demand, units Variance of weekly demand, units mm Product Forecasting Information The company uses two main forecasting methods based on annual data to predict orders for the following year, a weighted moving average and exponential smoothing. They provide you with the following information about forecasts for FY 2018 and FY 21119: We' htedMov'n Ex nential Year Demand IE I 3 p0 Average Forecast Forecast m m Weighted Moving Average uses H: - [Hi and Wu -tl.4. Exponential Smoothing uses o. = 0.9. Inventory Management Information The initial inventory for all sock styles combined at the beginning of FY 202i! is 3,500 units. You also have information on current costs. which includes: I Order coat to the company for an order placed with its current supplier, $i'order = S = 55cc I Holding cost per set per myear = H = $5 I The company currently pays $4 forcach set of socks. = P The company uses a continuous review replenishment m has IT systems in place that allow constant monitoring ofltcy information. Last year, the company used an RDP under this policy of LSD!) units forall sock styles and an order quantity Q of snoo units for all sock styles. The company has asked you to evaluate a number of alternatives to their current SCM practices, including at a minimum their choice of supplier, transporlation modes. warehouse capacity, order quantities and safety stock. Mternattve Suppliers The company has contacted potential alternative suppliers in China, who have offered the following information relative to the current supplier: The company wants to use a single-sourcing strategy, so they want a recommendation about which supplier would be best. The company has decided to use the following weights in analyzing the suppliers: Supplier Characteristic Unit Price, SIB-sock set Order cost, $forder Financial condltlon of the rm Alternative Transportation An alternative to their emreot transportation approach available to 1115 company is shipment by UPS Express Air from Shanghai to Richmond, which averages 3.5 days. The comparison of costs is given as: - : - wrationSu ier Characteristics [current] Altematlve] Units cost. seed: set l-E":l Average Transit time. weele\" - " No data are available about variation in transit times, so Accompany assumes this is constant. Similar to their decision about sourcing, The company wants to use a single-sourcing strategy for transportation, so they want a recommendation about which mode would be best. Alternative Warehouse Loeatlon The company would also like to assess whether its current warehouse location is appropriate based on where customers are located. It provides you the following information about its hey my indicates that its orders in each market are roughly proportional to the total population.
