Question
Please see the demand history for SKU #G6-8K and answer the following questions: 1 . Use Holt-Winters forecasting method to develop forecasts for March, April
Please see the demand history for SKU #G6-8K and answer the following questions:
1. Use Holt-Winters forecasting method to develop forecasts for March, April and May of Year 5. Assume values of alpha = 0.5, beta = 0.15, and gamma = 0.4. (Please be sure to use the entire demand history when implementing Holt-Winters method).
2. What is the reorder point for March of Year 5 if the desired type 1 SL is 96% and the lead time is 1 month and constant?
3. Use Excel solver to determine the values of alpha (0.02 alpha 0.51), beta (0.005 beta 0.176), and gamma (0.05 gamma 0.5) that minimize the mean absolute percentage error (MAPE). How does the reorder point calculated in Question 2 above change? Please also explain WHY it changes (hint: there are two reasons)?
Note: Please calculate the std. deviation of forecast errors over the entire history of in-sample forecasts that is available (i.e., starting in January of Year 3 up to and including February of Year 5).
A Month D Forecast B Year 1 1 1 1 1 1 1 2 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 1 1 1 1 1 2 2 2 2 2 16 17 2 2 2 2 2 2 2 2 2 3 3 C Demand 43,732 45,035 51,514 58,675 56,586 58,769 59,110 52,868 51,191 52,563 52,913 53,263 55,735 59,033 63,768 71,648 73,543 75,230 75,904 72,092 71,843 72,514 74,240 74,144 77,877 79,945 86,770 94,230 95,791 98,110 99,687 92,614 92,131 91,748 92,785 93,648 95,029 96,417 103,340 109,866 107,770 109,771 107,794 98,867 96,458 93,347 91,334 91,307 93,841 93,577 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 3 3 3 3 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 55 A Month D Forecast B Year 1 1 1 1 1 1 1 2 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 1 1 1 1 1 2 2 2 2 2 16 17 2 2 2 2 2 2 2 2 2 3 3 C Demand 43,732 45,035 51,514 58,675 56,586 58,769 59,110 52,868 51,191 52,563 52,913 53,263 55,735 59,033 63,768 71,648 73,543 75,230 75,904 72,092 71,843 72,514 74,240 74,144 77,877 79,945 86,770 94,230 95,791 98,110 99,687 92,614 92,131 91,748 92,785 93,648 95,029 96,417 103,340 109,866 107,770 109,771 107,794 98,867 96,458 93,347 91,334 91,307 93,841 93,577 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 3 3 3 3 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 55Step by Step Solution
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