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    Ops CM Project

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    namratagadkari05
    The document discusses a time series forecasting method for predicting demand over the next six months for three product categories - smartphones, laptops, and smartwatches. It recommends using an exponential smoothing method, provides forecasts and calculations of forecast errors for each category, and gives recommendations to improve the supply chain process for each one. Specifically, it suggests broadening smartphone suppliers and risk management, advanced inventory strategies for laptops, and improved collaborative planning with retailers for smartwatches.

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    Ops CM Project

    Uploaded by

    namratagadkari05
    351 views6 pages
    The document discusses a time series forecasting method for predicting demand over the next six months for three product categories - smartphones, laptops, and smartwatches. It recommends using an exponential smoothing method, provides forecasts and calculations of forecast errors for each category, and gives recommendations to improve the supply chain process for each one. Specifically, it suggests broadening smartphone suppliers and risk management, advanced inventory strategies for laptops, and improved collaborative planning with retailers for smartwatches.

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    Ops Cm Project

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    The document discusses a time series forecasting method for predicting demand over the next six months for three product categories - smartphones, laptops, and smartwatches. It recommends using an exponential smoothing method, provides forecasts and calculations of forecast errors for each category, and gives recommendations to improve the supply chain process for each one. Specifically, it suggests broadening smartphone suppliers and risk management, advanced inventory strategies for laptops, and improved collaborative planning with retailers for smartwatches.

    Copyright:

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

    Ops CM Project

    Uploaded by

    namratagadkari05
    The document discusses a time series forecasting method for predicting demand over the next six months for three product categories - smartphones, laptops, and smartwatches. It recommends using an exponential smoothing method, provides forecasts and calculations of forecast errors for each category, and gives recommendations to improve the supply chain process for each one. Specifically, it suggests broadening smartphone suppliers and risk management, advanced inventory strategies for laptops, and improved collaborative planning with retailers for smartwatches.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 6

    OPSCM PROJECT SUBMISSION

    Namrata Gadkari

    Task 1
    ● Method of forecasting:
     I recommend utilizing a time series forecasting technique, with a particular
    emphasis on the Exponential Smoothing method, such as the Holt-Winters
    method. This would be beneficial for predicting the demand for TechHub
    Electronics over the next six months, focusing on short-term projections. This
    method is well-suited for making short-term forecasts, particularly when dealing
    with data exhibiting both trend and seasonality. In the electronics sector, where
    sales are influenced by seasonal patterns, holidays, and product release cycles,
    this approach proves particularly advantageous.

    ● Justification for the choice of method:


     Exponential Smoothing method-
    Seasonality: Based on the provided demand data, it's evident that the sales of
    smartphones, laptops, and smartwatches follow a seasonal pattern, experiencing
    increases during specific months, such as the holiday shopping season. The Exponential
    Smoothing method is a suitable choice in this context, as it can recognize and
    incorporating seasonality into the forecasts.
    Data Sensitivity: Due to its differential weighting of recent and older observations, the
    exponential smoothing method is well-suited to capture and respond to current shifts in
    demand patterns. As mentioned earlier, the provided data is responsive to recent
    changes.
    Trend: The information further indicates a general upward trajectory in sales across the
    three product categories compared to the previous year. In a dynamic market, the trend
    component of the exponential smoothing method is essential as it allows for adaptation to
    changing sales trends.
    Assumption: When employing the Exponential Smoothing approach, it is crucial to
    assume that the trends observed in the past will persist in the future. This implies an
    expectation that the seasonality and patterns observed over the preceding 12 months will
    extend into the next six months. While this assumption may not always hold in a rapidly
    changing market like electronics, it provides a reasonable starting point for forecasting the
    immediate future.

    Task 2

    ● The formula used for forecasting demand: ESF : Alpha*Actualdemand+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 = (Actualdemand -
    forecast demand) * 100 / actual demand
    ● The forecast errors for the six months is 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)| / Σ 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
    ● Recommendations:
    Derived from the assessment of forecast errors and metrics for each product category
    (Smartphones, Laptops, and Smartwatches), along with the objective of enhancing the
    supply chain planning process, three specific recommendations are outlined, one tailored
    for each product category.

    Smartphones:
     Recommendation- Broaden the Supplier Base and Introduce Measures for Risk
    Management.
     Justification- It is imperative to diversify the sources of smartphone components
    and establish strong relationships with multiple suppliers due to the substantial
    demand fluctuations and the likelihood of disruptions in the electronics industry's
    supply chain. By adopting this approach, the risk associated with relying on a
    single source will be mitigated, minimizing the potential for production delays and
    shortages in the face of unexpected events such as natural disasters or
    geopolitical turmoil.
     Actions to take-
    o Identify the essential components utilized in smartphone manufacturing
    and assess the concentration of suppliers for each.
    o To mitigate the effects of regional disruptions, secure vital components
    from multiple suppliers, ideally situated in diverse geographic locations.
    o Develop contingency plans and strategies for risk reduction, such as
    maintaining buffer stocks and exploring alternative sourcing options, to
    promptly address potential supply chain interruptions.
    Laptops:
     Recommendation- Adopt Advanced Inventory Management Strategies.
     Justification- To effectively manage fluctuations in demand and decrease lead
    times for laptops, it is crucial to employ sophisticated inventory management
    techniques. The intricate manufacturing processes associated with laptops often
    result in extended lead times, posing challenges in promptly responding to abrupt
    increases in demand.
     Actions to take-
    o Adopt Just-In-Time (JIT) inventory management methods to reduce
    holding expenses while ensuring product availability.
    o Utilize demand sensing and demand shaping tools to enhance the
    anticipation and influence of customer demand, enabling more proactive
    inventory management.
    o Fine-tune safety stock levels by taking into account variables such as
    seasonality, supplier dependability, and transportation lead times.

    Smartwatches:
     Recommendation- Improve Collaborative Demand Planning with Retail Partners.
     Justification- Smartwatches experience a comparatively consistent demand
    throughout the year in contrast to smartphones and laptops. To improve the
    efficiency of the supply chain for smartwatches, it is essential to establish improved
    collaboration and communication channels with retailers, ensuring production
    aligns closely with the actual demand.
     Actions to take-
    o Introduce a Vendor-Managed Inventory (VMI) system or engage in
    Collaborative Planning, Forecasting, and Replenishment (CPFR) with
    major retailers to exchange demand forecasts and inventory information.
    o Periodically evaluate sales data and work closely with retailers to modify
    production plans based on up-to-date demand insights.
    o Contemplate providing incentives to retailers for timely and precise sharing
    of demand information to enhance forecast accuracy and mitigate
    challenges related to excess or insufficient stocking.

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