Case Study Personal Care Grooming Page 194 Operations & Supply Chain Management Michelle Prud'homme is the plant manager for

Personal Care Grooming, which makes a variety

of personal-care products such as combs, brushes, and

razors. The company produces over 1,000 products,

each of which is maintained as in-house inventory.

The inventory performance on these items in aggre-

gate is fairly good, with a 98 percent in-stock rate, but

at the individual product level, there are products

with from 0 to 385 days of inventory. Michelle does

not have a good understanding of how the company

forecasts demand for products because it is coded into

the company's ERP system, and there is no documen-

tation detailing how forecasts are calculated. In order

to assess how well the system is forecasting, she has

selected three representative products. One of the

products has a seasonal demand pattern, one of the

products has a strong trend component, and one of

the products has neither a seasonal nor a trend com-

ponent. She has asked you to recommend one or

more forecasting methods for each product and to

evaluate the relative accuracy of the forecast com-

pared to the existing method. As an additional test of

your abilities, Michelle has not told you which prod-

uct has which demand components.

Utilize the data in Table 5.25 to address the fol-

lowing issues:

1. Recommend a forecasting method for each prod-

uct based on a review of the data. Calculate fore-

casts for each month in the table, plus forecasts

for July and August of the current year.