Question
Customer Service is very important to Jane and John's Goodie Baskets. In fact the target for customer service level is 99%. The following are the
Customer Service is very important to Jane and John's Goodie Baskets. In fact the target for customer service level is 99%. The following are the sales results to the forecast by month for last year.
Period | Forecast | Actual |
Sept | 6000 | 12000 |
Oct | 6000 | 4000 |
Nov | 6000 | 6000 |
Dec | 6000 | 15000 |
Jan | 6000 | 10000 |
Feb | 6000 | 4000 |
Mar | 6000 | 6000 |
Apr | 6000 | 5000 |
May | 6000 | 3000 |
Jun | 6000 | 2000 |
Jul | 6000 | 1000 |
Aug | 6000 | 4000 |
b) What is standard deviation? c) What is the tracking signal per month? d) The company uses a trigger of +/- 4 , which period(s) should the forecast be looked at? e) Reviewing the actual versus forecast for last year, do you agree with Jane and John's Goodie Baskets' forecasting technique? Give your recommendations to improve the forecast accuracy. (I am looking for a qualitative recommendation; it does not need to be supported by a revised quantitative forecast.) f) Is the error random or bias? g) For Jane and John's Goodie Baskets to maintain their customer service goal above, how much safety stock should they maintain? What are the issues with carrying this level of safety stock given the product they are building?
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