Problem
Demand for self-cleaning bottles has shown a monthly trend of higher sales recently. The demand for the month of February 2020 is 18224. January 2020 level was 17896 and Trend 274. The forecast uses an α = 0.2 and β =0.25. Develop a forecast for the next 12 months using Holt's model. The company orders the bottles from a supplier in Bangladesh. It is ready to place an order now based on the next 12 months forecast as annual demand. The ordering cost is $2500 and the inventory annual holding cost is $3.00. What is the optimal ordering quantity? The lead time for delivery is a month and the monthly standard deviation for demand is 2000. Show a calculation on the reorder point and safety stock for a service level of 0.9. You can show this on an excel sheet if that is easier.