CASE M&L MANUFACTURING Product 2 Product 1 M&L Manufacturing makes various compo

Question

CASE M&L MANUFACTURING Product 2 Product 1 M&L Manufacturing makes various components for printers copiers, In addition to supplying these tems to a major manufac- turec, the company distributes these and similar items to office supply stores and computer stores as replacement parts for print and Week 38 54 57 60 41 20 dif. 3 ferent items. The two markets (the major manufacturer and the replacement market) require somewhat different handing. For example, replacement products must be packaged individually whereas products are shipped in bulk to the major manufacturer 42 41 41 90* 76 79 82 The company does not use forecasts for production planning Instead, the operations manager decides which items to produce and the batch size, based on orders and the amounts in inwentory. The products that have the fewest amounts in inventory get the highest priority. Demand is uneven, and the company has exper- enced being overstocked on some items and out of others. Being understocked has occasionally crested tensions with the manag ers of retail outlets. Another problem is that prices of raw mate- rials have been creeping up, although the operations manager thinks that this might be a temporary condition. 42 10 11 12 92 14 96 Because of competitive pressures and falling profits, the man- "Unusual order due to flooding of customer's warehouse ager has decided to undertake a number of changes. One change is to introduce more formal forecasting procedures in order to improve production planring and inventory managemment Questions Wich that in mind, the manager wants to begin forecasting for two products. These products are important for several reasons. First hey account for a disproportionately large share of the companys 2. Prepare a weekly forecast for the next four weeks for each profits Second, the manager believes that one of these products will product. Briefly explain why you chose the methods you used becone i 1. What are some of the potential benefits of a more formalized poach to forecasting? ncreasingly important to future growth plans, and third, the The manager has compiled data on product demand for the weeks. These (Hint: For product 2, a simple approach, possibly some naivelintuitive approach, would be preferable to a approach in view of the manager's disdain of more t other product has experienced periodic out-of-stock instances. ( Sort of two products from order records for the previous 14 are shown in the following table. methods.)

Explanation / Answer

Forecasting is important because it provides information that will help an organization determine what future demands will be. The benefits to forecasting include better-predicting demand, more accurate financial planning, higher on-time delivery of products/services, better inventory control (eliminating too much or too little inventory) and higher customer satisfaction. Forecasts play an important role in the planning process because they enable managers to anticipate the future so they can plan accordingly (Stevenson, 2015). In the M&L case, they are experiencing overstock on some items and out of stock on others, therefore, utilizing a more formalized approach to forecasting would help decrease these problems.

For Product #1, I decided to use a linear trend method because in reviewing the data given I had seen an increasing trend in the first 14 weeks (with the exception of week 7 that had a spike) I plotted down the sales data for the last 14 weeks using the Excel template (See Attached Excel Spreadsheet)and came up with the equation scales = 3.457*week + 48.28. With this information, I forecasted the next four weeks for Product #1.

For Product #2, I used the naïve forecast approach due to the manager’s dislike of more technical methods. I just used the single previous sales data for week 14 to forecast the sales for the next four weeks.

Product 1

Product 2

(3.457 x 15 +48.28)

(3.457 x 16 +48.28)

(3.457 x 17 +48.28)

(3.457 x 18 +48.28)

REFERENCE:

Stevenson, W. (2015).Operations Management (12th ed.). Boston: McGraw-Hill.

Product 1

Product 2

(3.457 x 15 +48.28)

(3.457 x 16 +48.28)

(3.457 x 17 +48.28)

(3.457 x 18 +48.28)

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.