ISOM Forecasting question

User Generated

wrffjll

Business Finance

Description

The Swim Wear Store sells bathing caps. As the store does not sell a lot of them, such that ordering them periodically during the year when they run out has been the method of restocking. The store has the opportunity to purchase them in bulk at a much cheaper price from a supplier, but the supplier is only willing to ship these once a year. Thus, the Swim Wear Store needs to predict how many they will need next year. They have many loyal customers that will be very upset if they are not able to purchase a swim cap. Swim Wear Store has determined that customers will not be upset if they cannot purchase swim caps in December, just in case they run out. Swim Wear Store has kept the monthly sales records of swim caps for the years, 2015, 2016 and 2017. The store would also like to know the monthly sales forecast for swim caps in 2018, as it will help them to determine sales of other products, along with the total sales of swim caps for 2018. Follow the steps below.

  • Create a numerical reference for each month in the Time column.
  • In the column CMA, use the centered moving average for the month.
  • In the column seasonal index, (Sales/CMA) for each month.
  • Find the seasonal ratio, using the table labeled Seasonal Ratio
  • Calculate the deseasonalized demand. (Sales/Seasonal Ratio)
  • Use Trend to forecast demand.
  • Seasonalize the forecast (TrendX Seasonal Ratio)

How much is the overall demand for bathing caps for 2018? What is the monthly demand?

Unformatted Attachment Preview

Seasonal Month Sales Time CMA Trend Index Jan Feb Mar April May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 200 203 218 230 245 346 376 389 231 200 189 155 178 193 192 201 212 367 391 401 204 201 183 145 196 199 214 228 231 376 402 426 205 206 178 142 Seasonal Deseasonalized Ratio Demand Sep Oct Nov Dec Seasonlized 2015 forecast Jan Feb Mar Apr April May Jun May Jul Aug June Sep Oct July Nov Dec 2016 2017 Average Seasonilized Ratio Forecasting Quiz- ISOM 201 Due: November 20, 2018 The Swim Wear Store sells bathing caps. As the store does not sell a lot of them, such that ordering them periodically during the year when they run out has been the method of restocking. The store has the opportunity to purchase them in bulk at a much cheaper price from a supplier, but the supplier is only willing to ship these once a year. Thus, the Swim Wear Store needs to predict how many they will need next year. They have many loyal customers that will be very upset if they are not able to purchase a swim cap. Swim Wear Store has determined that customers will not be upset if they cannot purchase swim caps in December, just in case they run out. Swim Wear Store has kept the monthly sales records of swim caps for the years, 2015, 2016 and 2017. The store would also like to know the monthly sales forecast for swim caps in 2018, as it will help them to determine sales of other products, along with the total sales of swim caps for 2018. Follow the steps below. 1. 2. 3. 4. 5. 6. 7. Create a numerical reference for each month in the Time column. In the column CMA, use the centered moving average for the month. In the column seasonal index, (Sales/CMA) for each month. Find the seasonal ratio, using the table labeled Seasonal Ratio Calculate the deseasonalized demand. (Sales/Seasonal Ratio) Use Trend to forecast demand. Seasonalize the forecast (Trend X Seasonal Ratio) How much is the overall demand for bathing caps for 2018? What is the monthly demand?
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Explanation & Answer

Attached.

Seasonal

Month

Sales

Time

CMA

Deseasonalized
Seasonal Ratio

Index

Jan
Feb
Mar
April
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec

200
203
218
230
245
346
376
389
231
200
189
155
178
193
192
201
212
367
391
401
204
201
183
145
196
199
214
228
231
376
402
426
205
206
178
142

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36

201.5
210.5
224
237.5
295.5
361
382.5
310
215.5
194.5
172
166.5
185.5
192.5
196.5
206.5
289.5
379
396
302.5
202.5
192
164
170.5
197.5
206.5
...


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