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Assignment – Long Range Planning
CAPACITY AND DEMAND PLANNING SCENARIO
After reviewing the long-range planning demonstration video (posted on Canvas) and looking over the related PowerPoint slides, complete the following case. Transfer your answers to the Canvas quiz. You have been hired as a demand planning intern for Heavenly Creations (HC). They want you to develop a forecast for their popular line of telescopes. The goal is to project how many telescopes they should produce in September to meet future demand. During your first meeting, the supply chain director tells you that demand
peaks in August and then slowly drops for a few months before a Christmas rush. At the end of the meeting, you are handed some data to analyze.
Month
Production Output
Actual Demand Forecast of
Demand
May 2023
6,875
5,980
5,805
June 2023
7,250
6,555
7,090
July 2023
7,375
6,670
7,440
August 2023
7,500
7,245
7,775
Effective production capacity = 8,000 units per month Overtime production capacity = 500 units per month
Historical demand forecasting error = ± 400 units per month
Other useful information about the company:
Design production capacity = 9,000 units per month
Assignment – Long Range Planning
1.
Evaluate the capacity of HC’s internal production capacity to serve demand. Calculate production capacity utilization
for August 2023: Based on HC's available resources, will they realistically have enough internal production capacity to serve
anticipated demand of 8,600
telescopes in September 2023?
Based solely on what you see in the table (before doing any calculations), what is your evaluation of the marketing team’s demand forecast relative to the actual demand for the previous four months? 2.
Calculate the demand forecast for September 2023 using the methods listed below. Work with the data provided in the table on the previous page. Three-Month Simple Moving Average Three-Month Weighted Moving Average Weight factors t – 1 = .45 t – 2 = .35 t – 3 = .20
Exponential Smoothing
Alpha smoothing constant = .7
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$ 50.00
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