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    OPSCMProject NallakantamAmbika

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    Nallakantam ambika
    The document discusses forecasting demand and implementing strategies to improve forecast accuracy for smartphones, laptops, and smartwatches. Exponential smoothing was used to forecast demand for the next six months for each product. Forecast errors and MAPE were calculated and showed high variability for smartphones and laptops compared to smartwatches. For smartphones, the recommendation is to diversify suppliers to mitigate risks. For laptops, advanced inventory management techniques like JIT and optimizing safety stock are suggested. For smartwatches, the strategy is to enhance demand collaboration with retailers through systems like VMI and CPFR.

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    OPSCMProject NallakantamAmbika

    Uploaded by

    Nallakantam ambika
    93 views6 pages
    The document discusses forecasting demand and implementing strategies to improve forecast accuracy for smartphones, laptops, and smartwatches. Exponential smoothing was used to forecast demand for the next six months for each product. Forecast errors and MAPE were calculated and showed high variability for smartphones and laptops compared to smartwatches. For smartphones, the recommendation is to diversify suppliers to mitigate risks. For laptops, advanced inventory management techniques like JIT and optimizing safety stock are suggested. For smartwatches, the strategy is to enhance demand collaboration with retailers through systems like VMI and CPFR.

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    OPSCMProject_NallakantamAmbika

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    The document discusses forecasting demand and implementing strategies to improve forecast accuracy for smartphones, laptops, and smartwatches. Exponential smoothing was used to forecast demand for the next six months for each product. Forecast errors and MAPE were calculated and showed high variability for smartphones and laptops compared to smartwatches. For smartphones, the recommendation is to diversify suppliers to mitigate risks. For laptops, advanced inventory management techniques like JIT and optimizing safety stock are suggested. For smartwatches, the strategy is to enhance demand collaboration with retailers through systems like VMI and CPFR.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    93 views6 pages

    OPSCMProject NallakantamAmbika

    Uploaded by

    Nallakantam ambika
    The document discusses forecasting demand and implementing strategies to improve forecast accuracy for smartphones, laptops, and smartwatches. Exponential smoothing was used to forecast demand for the next six months for each product. Forecast errors and MAPE were calculated and showed high variability for smartphones and laptops compared to smartwatches. For smartphones, the recommendation is to diversify suppliers to mitigate risks. For laptops, advanced inventory management techniques like JIT and optimizing safety stock are suggested. For smartwatches, the strategy is to enhance demand collaboration with retailers through systems like VMI and CPFR.

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    PROJECT SUBMISSION

    Task 1

    ● I advise using the exponential smoothing approach for predicting short-term demand for
    the following six months. This technique is appropriate for items with constantly
    changing customer tastes and technology breakthroughs because it provides more weight
    to recent data and is, therefore, more sensitive to shifts.
    ● Justification: Exponential Smoothing gives more weight to current data, which is
    important in a field that moves quickly. According to the degree of sensitivity of the
    supplied data to recent modifications, it is assumed that the most current sales
    information is the best predictor of upcoming sales.
    ● Assumption: Exponential smoothing assumes that historical demand data accurately
    predicts future demand trends. This assumption might not be entirely correct in an
    industry that is moving quickly, but the method's sensitivity to current data helps to
    lessen this drawback.
    ●

    Task 2
    ● The formula used for forecasting demand: ESF: Alpha*Actual demand+1-Alpha*forecast
    demand

    ● The demand forecast for the next six months is shown in the table below

    Month Smartphones (Forecast) Laptops (Forecast) Smartwatches (Forecast)

    Jan 2044.92 1023.10 352.48

    Feb 2121.44 1061.17 360.74

    Mar 2175.01 1087.82 366.52


    Apr 2212.51 1106.47 370.56

    May 2238.76 1119.53 373.39

    Jun 2257.13 1128.67 375.37

    Task 3
    ● The formula used for calculating forecast errors: Forecasting error = (Actual demand -
    forecast demand) * 100 / actual demand

    ● The forecast errors for the six months are shown in the table below

    Month Smartphones Laptops Smartwatches

    Jan 444.92 268.10 93.48

    Feb 472.44 196.17 68.74

    Mar 606.01 210.82 116.52

    Apr 462.51 183.47 156.56


    May 318.76 119.53 173.39

    Jun 217.13 28.67 179.37

    Task 4
    ● The formula for calculating MAPE: MAPE = Σ (|actual – forecast| / |actual|)
    ● MAPE for all product categories for the six months:

    Month Smartphones Laptops Smartwatches

    Jan 27.81 35.51 36.09

    Feb 28.65 22.68 23.54

    Mar 38.62 24.04 46.61

    Apr 26.43 19.88 73.16

    May 16.60 11.95 86.70


    Jun 10.64 2.61 91.52

    ● The formula for calculating Bias: Total Variances (Forecast- Actual)/Total Actual
    ● Bias for all product categories for the six months:

    Month Smartphones Laptops Smartwatches

    Jan 0.042 0.0486 0.0662

    Feb 0.045 0.0355 0.0487

    Mar 0.058 0.0382 0.0825

    Apr 0.044 0.0332 0.1109

    May 0.030 0.0217 0.1228

    Jun 0.021 0.0052 0.1271

    Task 5

    Based on the analysis of the forecast errors and metrics:


    ➢ Recommendation for smartphones: Implement risk mitigation and diversify suppliers.
    It's essential to diversify smartphone component suppliers and build trusting relationships with
    several vendors given the high demand volatility and potential supply chain disruptions in the
    electronics industry. The risk of single-source dependence, which can cause production delays and
    shortages during unforeseen occurrences like natural catastrophes or geopolitical upheavals, will
    be reduced by this technique.

    ➢ Strategy to Adopt
    • Determine the crucial smartphone production components and evaluate
    the concentration of suppliers for each.
    • To lessen the effects of local disruptions, procure vital supplies from
    several vendors, ideally located in different geographic areas.
    • Create backup plans and risk-reduction methods, such as buffer stocks
    and alternate sourcing choices, to swiftly handle supply chain
    interruptions.
    ➢ Recommendation For Laptops: Implement Advanced Inventory Management
    Techniques
    Advanced inventory management strategies must be used if we want to better control demand
    changes and shorten lead times for laptops. Due to their complicated production procedures,
    laptops frequently have longer lead times, making it difficult to react swiftly to unexpected demand
    spikes.
    ➢ Strategy to Adopt
    • Just-In-Time (JIT) inventory management techniques should be used to reduce carrying
    costs while maintaining product availability.
    • Make use of tools for demand sensing and shaping to more accurately predict and influence
    consumer demand, enabling more proactive inventory management.
    • By taking into account variables like seasonality, supplier dependability, and transportation
    lead times, safety stock levels can be optimized.
    ➢ Recommendation For Smartphones Enhance Demand Collaboration with Retailers

    •Compared to smartphones and laptops, the demand for smartwatches is more


    consistent over the course of the year. In order to better coordinate production with
    actual demand, it is essential to build stronger channels of collaboration and
    communication with merchants.
    ➢ Strategy to Adopt

    • To communicate demand projections and inventory information with important retailers,


    implement a vendor-managed inventory (VMI) system or collaborative planning,
    forecasting, and replenishment (CPFR).
    • Regularly examine sales data and work with merchants to modify production schedules in
    accordance with real-time demand insights.
    • To increase prediction accuracy and lessen concerns with overstocking or understocking,
    think about providing incentives to retailers for prompt and accurate demand information
    sharing

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