Questions:1. What are some of the potential benefits of a more formalized approach to forecasting?2. Prepare a weekly forecast for the next four weeks for each product. Briefly explain why you chose the methods you used. (Hint for product 2, a simple approach, possibly some sort of naive/intuitive approach, would be preferable to a technical approach in view of the manager's disdain of more technical methods). CASEM&L MANUFACTURINGM&L Manufacturing makes various components for printers andcopiers. In addition to supplying these items to a major manufac-turer, the company distributes these and similar items to officesupply stores and computer stores as replacement parts for print-ers and desktop copiers. In all, the company makes about 20 dif-ferent items. The two markets (the major manufacturer and thereplacement market) require somewhat different handling. Forexample, replacement products must be packaged individuallywhereas products are shipped in bulk to the major manufacturer.The company does not use forecasts for production planning.Instead, the operations manager decides which items to produceand the batch size, based on orders and the amounts in inventory.The products that have the fewest amounts in inventory get thehighest priority. Demand is uneven, and the company has experi-Casel d being overstocked on some items and out of others. Beingunderstocked has occasionally created tensions with the manag-WeekProduct 1Product 2504025438574146046644267417.904176477942108243118542128749ers of retail outlets. Another problem is that prices of raw mate-rials have been creeping up, although the operations managerthinks that this might be a temporary condition.Because of competitive pressures and falling profits, the man-ager has decided to undertake a number of changes. One changeis to introduce more formal forecasting procedures in order to Questionsimprove production planning and inventory management.With that in mind, the manager wants to begin forecasting for twoproducts. These products are important for several reasons. First,they account for a disproportionately large share of the company'sprofits. Second, the manager believes that one of these products will139243149644"Unusual order due to flooding of customer's warehouse.1. What are some of the potential benefits of a more formalizedapproach to forecasting?become increasingly important to future growth plans; and third, theother product has experienced periodic out-of-stock instances.The manager has compiled data on product demand for thetwo products from order records for the previous 14 weeks. Theseare shown in the following table.2. Prepare a weekly forecast for the next four weeks for eachproduct. Briefly explain why you chose the methods you used.(Hint: For product 2, a simple approach, possibly some sort ofnaivelintuitive approach, would be preferable to a technicalapproach in view of the manager's disdain of more technicalmethods.)

The process that uses to predict the future based on past data is known as forecasting. The…

Questions: 1. What are some of the potential benefits of a more formalized approach to forecasting? 2. Prepare a weekly forecast for the next four weeks for each product. Briefly explain why you chose the methods you used. (Hint for product 2, a simple approach, possibly some sort of naive/intuitive approach, would be preferable to a technical approach in view of the manager's disdain of more technical methods).

Questions: 1. What are some of the potential benefits of a more formalized approach to forecasting? 2. Prepare a weekly forecast for the next four weeks for each product. Briefly explain why you chose the methods you used. (Hint for product 2, a simple approach, possibly some sort of naive/intuitive approach, would be preferable to a technical approach in view of the manager's disdain of more technical methods).

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter6: Optimization Models With Integer Variables

Section6.4: Fixed-cost Models

Problem 14P

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