16. The Gonzales Electric Company’s 12 products are further grouped into four product families. Products A, B, and C compose family l; D, E, and F are in family 2; G, H, and I compose family 3; and products J, K, and L make up family 4. Ernesto Gonzales has the following exponential smoothing forecasts of monthly demand for each product.

Gonzales’s sales force has also come up with the monthly forecasts of sales for each product family.

a. Roll up the individual product forecasts and compare them to the forecast provided by the sales force. Using a spreadsheet, roll down the forecast to make the individual item forecast agree with the sales force forecast. Calculate dollar value and number of units in the individual item forecast.

b. Top management has independently decided to set a $300,000 overall monthly sales goal for the company. Adjust the sales force forecast to reflect this new goal; then roll down the forecast to the individual item level. Calculate dollar value and number of units in the individual item forecast.

Transcribed Image Text:

Family Product Forecast $/Unit Family Product Forecast S/Unit 1 A 10 1,000 3 B 15 1,200 G H 100 250 180 100 C 20 900 1 220 100 2 D 5 5,000 J 2 10,000 E F 32 3 7,000 K 4 9,000 9,000 L 3 8,000