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Production Planning & Inventory Control (Mgmt617) Assignment # 1

The operations manager needs to forecast demand for Product X100 for the upcoming months. He has provided monthly sales data from the current year. He wants to use exponential smoothing with alpha (α) values of 0.2 and 0.6 to forecast, but is unsure which α value provides a better forecast. You must [1] forecast demand for all months using exponential smoothing with α=0.2 and α=0.6, [2] calculate the mean absolute deviation for each, and [3] conclude which α value is more appropriate based on the mean absolute deviations.

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M Noaman Akbar
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183 views

Production Planning & Inventory Control (Mgmt617) Assignment # 1

The operations manager needs to forecast demand for Product X100 for the upcoming months. He has provided monthly sales data from the current year. He wants to use exponential smoothing with alpha (α) values of 0.2 and 0.6 to forecast, but is unsure which α value provides a better forecast. You must [1] forecast demand for all months using exponential smoothing with α=0.2 and α=0.6, [2] calculate the mean absolute deviation for each, and [3] conclude which α value is more appropriate based on the mean absolute deviations.

Uploaded by

M Noaman Akbar
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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PRODUCTION PLANNING & INVENTORY CONTROL (MGMT617)

ASSIGNMENT # 1
Due Date: June 10, 2020 Marks: 10

SCENARIO:

The operations manager of a manufacturing company is planning for the upcoming months and
wants to forecast the demand of Product X100. He has the monthly sales data of current year
given in following table. The manager wants to use Exponential Smoothing Method to forecast
but not sure which value of 𝛼 (smoothing constant) gives better forecast.

Month 1 2 3 4 5 6 7 8 9 10 11 12
Sales 218 131 114 129 105 164 209 222 137 116 114 132

Required:

1. Your task is to help the manager to arrive at a decision by forecasting the demands for all
possible months using Exponential Smoothing Method with
a. 𝛼 = 0.2
b. 𝛼 = 0.6 (6)
2. Calculate Mean Absolute Deviation (MAD) for both values of 𝛼 and conclude which value
of 𝛼 is more appropriate for the product. (4)

Instructions:

• You have to calculate the forecasts and present in tabular form.


• Take forecast of Month 1 equal to its sales.
• Write formulae and show necessary calculations.
• You may use MS Excel for calculations and copy-paste tables in your solution file (MS
Word format).
• For question 2, decide better technique and give arguments.
• Watch video lectures and consult book to complete the assignment.

Important:

24 hours extra / grace period after the due date are usually available to overcome uploading
difficulties. This extra time should only be used to meet the emergencies and above-mentioned
due dates should always be treated as final to avoid any inconvenience.
Deadline:

• Make sure to upload the solution file before the due date on VULMS.
• Any submission made via email after the due date will not be accepted.

Formatting Guidelines:

• Use the font style “Times New Roman” or “Arial” and font size “12”.
• It is advised to compose your document in MS-Word format.
• You may also compose your assignment in Open Office format.
• Use black and blue font colours only.

Referencing Guidelines:

• Use APA style for referencing and citation. For guidance search “APA reference style”
in Google and read various websites containing information for better understanding
or visit
http://linguistics.byu.edu/faculty/henrichsenl/apa/APA01.html

Rules for Marking

Please note that your assignment will not be graded or graded as Zero (0), if:
• Any of the given instructions is not followed
• It is copied or plagiarized
• It is submitted after the due date.
• The file you uploaded does not open or is corrupt.

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