You are the supply chain manager for an electronics-manufacturing company. In this assignment, you will use the following data to obtain forecasts for your company through various forecasting techniques.
| Quarter |
Forecast |
Actual Demand |
Error |
| 4Q 2008 |
200 |
220 |
|
| 1Q 2009 |
220 |
215 |
|
| 2Q 2009 |
215 |
210 |
|
| 3Q 2009 |
210 |
220 |
|
| 4Q 2009 |
220 |
225 |
|
| 1Q 2010 |
225 |
240 |
|
| 2Q 2010 |
240 |
255 |
|
| 3Q 2010 |
|
260 |
|
| 4Q 2010 |
|
270 |
|
| 1Q 2011 |
|
|
|
Consolidate the results of the following problems in a 2- to 3-page report in a Microsoft Word document. Do not use Microsoft Excel utilities for this assignment.
- Using the three quarters moving average, find out the forecasts for 3Q 2010, 4Q 2010, and 1Q 2011.
- Compute the forecasts for 3Q 2010, 4Q 2010, and 1Q 2011 using exponential smoothing with a smoothing factor of 0.6.
- Compute the forecasts for all quarters of 2010 using the three quarter weighted moving average, with the most recent data weighted at 0.5, the second-most recent data weighted at 0.35, and the third-most recent data weighted at 0.15.
- Using the data provided in the above table, explain what forecasting techniques are being used for 2008 and the first two quarters of 2009.
- Computed the forecasting error using the exponential smoothing technique.
- Computed the forecasting error using the weighted smoothing average method.
- On the basis of your calculations, explain which technique provides the most accurate forecast for your company. Explain your answer with critical reasoning.