1. Simple forecasting methods like the 3-month average work best with what type of demand?

2. Given that forecasts are never perfect, what can a company do to understand their level of performance and improve?

Calculate the demand forecast for February 2021 using the methods.

3. Calculate the three-month simple moving average.

4. Three-month moving average: weight factors t-1=.5 t-2=.3 t-3=.2

5. exponential smoothing: alpha smoothing constant=.6

6. which method do you recommend the company use when forecasting 2021 demand?

7. does your company have enough capacity to serve demand in February 2021?

8. If your forecast does not match capacity, what can be done in the short run to either deal with excess capacity or a shortage of capacity?

Evaluate the company's forecast accuracy over the last four months.

9. mean absolute deviation

10. How well is the company doing in terms of forecast accuracy?

You have been hired as a demand planning intern for the Maui Jim Inc. They want you to develop a forecast for their Longboard style of sunglasses. The goal is to determine how many pair they will produce to meet retailer demand in February 2021. During your first meeting, you were handed some data to work with and the product team talked about the company's upcoming promotional blitz to support Spring Break '21 in major vacation destinations. Month August 2020 September 2020 October 2020 November 2020 December 2020 January 2021 Forecast 5,800 5,000 4,500 3,000 4,500 4,400 Demand 5,400 3,800 3,200 3,300 3,900 4,300 Other useful information about the company: Internal production capacity = 3,500 units per month under normal conditions Historical forecasting error = $ 300 units per month