Case Study- Furnmart Inc. Furnmart Inc is a medium size Ontario Company, which supplies office furniture...
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Case Study- Furnmart Inc. Furnmart Inc is a medium size Ontario Company, which supplies office furniture to different shops in the GTA. The company does not have the financial resources to hold high levels of inventory, and therefore manufactures its furniture per sale orders. This strategy causes long delivery times (4-5 weeks) and other operational inefficiencies, including the cancellation of sales orders by their most loyal customers. Other furniture manufacturers, mainly from the USA have started penetrating into the GTA market, and the business future for Furnmart looks bleak. John Smart the founder and CEO, decided to change the corporate strategy and to manufacture products for stock. In that way its delivery times will decrease to less than one week, and the company will be able to keep their market share and even increase it. In order to minimize stock (inventory) levels and their very high financial cost, Smart asked the Operations Manager- Dave Butcher, to develop a forecasting method that will achieve this goal. You just got your business degree from Humber, and on Monday afternoon you were assigned the job of developing a forecasting method. It was decided to develop a prototype forecast, with only one product, and then to develop forecasting methods for all the other products of the company, if the prototype was successful. Dave Butcher gave you the actual demand for one of the products- Single Computer Desk (SCD), which was as follows: Jan Feb Mar Apr May Jun Jul Aug Sep 47 45 50 51 56 54 49 48 52 54 58 57 52 50 56 57 61 62 51 56 63 Oct Nov Dec 54 55 56 60 63 59 55 55 65 81 65 67 67 69 75 Year 2021 2022 2023 He asked you to prepare a report for his Wednesday morning meeting with John Smart. You should investigate three forecasting methods: Simple Moving Average, Weighted Moving Average and Exponential Smoothing. Then, test each of them on the actual demand of years 2021/2022/2023. The more successful method will be used for the real forecasting in year 2024. Dave added that he had heard vaguely about a method ("they did not teach it when I was a student"), which uses trend, seasonality and "some other staff, and maybe you should look into it as well. Draw a graph of the actual demand of the SCD for years 2021/2022/2023. Case Study- Furnmart Inc. Furnmart Inc is a medium size Ontario Company, which supplies office furniture to different shops in the GTA. The company does not have the financial resources to hold high levels of inventory, and therefore manufactures its furniture per sale orders. This strategy causes long delivery times (4-5 weeks) and other operational inefficiencies, including the cancellation of sales orders by their most loyal customers. Other furniture manufacturers, mainly from the USA have started penetrating into the GTA market, and the business future for Furnmart looks bleak. John Smart the founder and CEO, decided to change the corporate strategy and to manufacture products for stock. In that way its delivery times will decrease to less than one week, and the company will be able to keep their market share and even increase it. In order to minimize stock (inventory) levels and their very high financial cost, Smart asked the Operations Manager- Dave Butcher, to develop a forecasting method that will achieve this goal. You just got your business degree from Humber, and on Monday afternoon you were assigned the job of developing a forecasting method. It was decided to develop a prototype forecast, with only one product, and then to develop forecasting methods for all the other products of the company, if the prototype was successful. Dave Butcher gave you the actual demand for one of the products- Single Computer Desk (SCD), which was as follows: Jan Feb Mar Apr May Jun Jul Aug Sep 47 45 50 51 56 54 49 48 52 54 58 57 52 50 56 57 61 62 51 56 63 Oct Nov Dec 54 55 56 60 63 59 55 55 65 81 65 67 67 69 75 Year 2021 2022 2023 He asked you to prepare a report for his Wednesday morning meeting with John Smart. You should investigate three forecasting methods: Simple Moving Average, Weighted Moving Average and Exponential Smoothing. Then, test each of them on the actual demand of years 2021/2022/2023. The more successful method will be used for the real forecasting in year 2024. Dave added that he had heard vaguely about a method ("they did not teach it when I was a student"), which uses trend, seasonality and "some other staff, and maybe you should look into it as well. Draw a graph of the actual demand of the SCD for years 2021/2022/2023.
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To begin lets first draw a graph of the actual demand for the Single Computer Desk SCD for the years 2021 2022 and 2023 2021 2022 2023 JanDec JanDec J... View the full answer
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