ABC corporation located near Toronto manufacturers a specific souvenir item

$($

product X

$)$

$$for tourists and sells it to different shops located at tourist destinations

in Ontario. Off late, they are having issues with erroneous forecasting. The

management needs to decide on the forecast of the item for

$2024$

$.$

$$The demand for

the product for every month since January

$2018$

$$to December

$2023$

$$are given.

Examine the data and choose an appropriate method of forecasting the demand for

$2024$

$$from the following:

$$

$$Trend adjusted exponential smoothing

$($

alpha

$=$

$0\mathrm{.}3$

; beta

$=$

$\mathrm{.}4)$

$$

$$Seasonal forecasting using seasonal relatives

$($

Assume that annual demand in

$2024$

$$will be

$10$

$\%$

$$more than that of

$2023)$

Note: Trend adjusted exponential smoothing is a

$$

one

$-$

step

$-$

ahead

$$

$$forecast$.$

a

$)$

$$Using the appropriate method from the above, forecast the demand of the

product for all months of the year

$2024$

$.$

$$Explain which method you chose

and why.

b

$)1$

$\%$

$$error in forecasting costs ABC corporation $

$500$

$.$

$$How much do you

think your forecast is expected to cost them in

$2024($

this might be

approximate and not exact

$)$

$?$

c

$)$

$$Each unit of the product X for ABC corporation needs

$1$

$$unit of a specific

raw material from a supplier. Over the years since

$2018$

$,$

$$they have followed

an ordering policy of equal amount of order every quarter

$($

assume that they

predicted yearly demand accurately

$)$

$.$

$$Given the following information about

setup and holding costs, find how much they could have saved by ordering

the EOQ every year from

$2018$

$$till

$2023$

:

a

$.$

$$Setup costs

$($

S

$)$

$=$

$$$

$200$

$$per order in

$2018$

$$and increased by

$5$

$\%$

$$on

$1$

st

January every year

b

$.$

$$Holding costs

$($

H

$)$

$=$

$$$

$5$

$$per item in

$2018$

$$and increased by

$10$

$\%$

$$on

$1$

st

January every year.

d

$)$

$$In

$2023$

$,$

$$ABC Corporation introduced two new products

$$

$$Y and Z

$.$

Assuming expected demand for Y and Z were

$2000$

$$and

$3000$

$$and the unit

profit margins for products X

$,$

$$Y

$,$

$$Z are $

$12$

$,$

$$$

$14$

$$and $

$15$

$$respectively$,$ what

was the optimal number of each product

$($

X

$,$

$$Y and Z

$)$

$$that ABC corporation

produced? They did not want to produce more than the demand and the

budget for producing all the products was $

$19000$

$.$

$$Production cost for each

unit of X

$,$

$$Y and Z were $

$2$

$,$

$$$

$3$

$$and $

$1$

$$respectively$.$

Month Deamand for product X

Jan

$2018242$

Feb

$2018233$

Mar

$2018267$

Apr

$2018269$

May

$2018270$

Jun

$2018315$

Jul

$2018364$

Aug

$2018347$

Sep

$2018312$

Oct

$2018274$

Nov

$2018237$

Dec

$2018278$

Jan

$2019284$

Feb

$2019277$

Mar

$2019317$

Apr

$2019313$

May

$2019318$

Jun

$2019374$

Jul

$2019413$

Aug

$2019405$

Sep

$2019355$

Oct

$2019306$

Nov

$2019271$

Dec

$2019306$

Jan

$2020315$

Feb

$2020301$

Mar

$2020356$

Apr

$2020348$

May

$2020355$

Jun

$2020422$

Jul

$2020465$

Aug

$2020467$

Sep

$2020404$

Oct

$2020347$

Nov

$2020305$

Dec

$2020336$

Jan

$2021340$

Feb

$2021318$

Mar

$2021362$

Apr

$2021348$

May

$2021363$

Jun

$2021435$

Jul

$2021491$

Aug

$2021505$

Sep

$2021404$

Oct

$2021359$

Nov

$2021310$

Dec

$2021337$

Jan

$2022360$

Feb

$2022342$

Mar

$2022406$

Apr

$2022396$

May

$2022420$

Jun

$2022472$

Jul

$2022548$

Aug

$2022559$

Sep

$2022463$

Oct

$2022407$

Nov

$2022362$

Dec

$2022405$

Jan

$2023417$

Feb

$2023391$

Mar

$2023419$

Apr

$2023461$

May

$2023472$

Jun

$2023535$

Jul

$2023622$

Aug

$2023606$

Sep

$2023508$

Oct

$2023461$

Nov

$2023390$

Dec

$2023432$