As the production planner for one of your firms product lines, you receive sales forecasts from your firms regional sales managers about the middle of each month. Based on these sales forecasts for the following month, you need to create production plans for each of the two products in your product line. A comparison of forecasts vs. actual sales data for the past four months for two products for two channels from a new-appointed regional sales manager are shown in the table below. The indirect channel is the retail channel and retailers typically hold some buffer inventory of their own to service varying final-customer demand requirements. The direct channel involves direct-to-final-customer sales via an e-commerce sales channel and associated major account initiatives. These channels do partially overlap, for those customers who view both channels as viable ways of purchasing these products.

	Product 1				Product 2
	Indirect Channel		Direct Channel		Indirect Channel		Direct Channel
	Forecast	Actual	Forecast	Actual	Forecast	Actual	Forecast	Actual
Month 1	4,500	13,271	6,500	4,519	4,400	5,863	3,900	2,584
Month 2	21,000	9,260	8,500	10,850	9,000	4,895	4,000	3,111
Month 3	11,000	3,820	11,000	4,684	5,500	7,502	3,500	4,848
Month 4	7,000	16,748	8,000	12,126	9,000	653	6,000	2,567
Month 5	16,000		12,000		6,000		4,500

Based on these data and particularly on the sales managers month-5 forecasts shown in the table, what production volume would you schedule in month 5 for each of these two products?

For each product, you must make a total sales volume forecast (the total combined sales volume for the indirect and direct channels). Your production planning goal is to have production volume exactly equal sales. Assume that its equally bad to over- or under-forecast and over- or under-produce (i.e., its equally costly to have excess inventory as it is to have unfilled orders), you have no on-hand inventory, and there are no significant setup costs for your regular monthly production run.

HINT: sometimes the simplest methods are the best. Think of the first five forecasting tools you learned in this course.

Describe your forecasting tool. Remember to include "The tool I chose..." in your answer or it will be marked incorrect.

1. Calculate product #1's indirect and direct channel. Show the sum of these two calculations.

45 points

QUESTION 3

1. Calculate product #2's indirect and direct channel. Show the sum of these two calculations.