ICMM

Inventory Control and Materials Management

Using the data given below please complete the forecasts using the following 3 methods

For each calculate the mean absolute deviation (MAD)

What forecast method is best, why?

2 month
Month	Pizzas	Forecast	Absolute value of error
1	230
2	240
3	260
4	320
5	320
6	350
7
sum of errors
MAD

3 month
Month	Pizzas	Forecast	Absolute value of error
1	230
2	240
3	260
4	320
5	320
6	350
7
sum of errors
MAD

2 month weighted moving average
Month	Pizzas	Forecast	Absolute value of error	weight for most recent period	weight for oldest period
1	230			0.8	0.2
2	240
3	260
4	320
5	320
6	350
7
sum of errors	0
MAD	0

A manufacturer of bicycle parts is looking at the expected demand for all of their seats over the next 6 months. They want to plan out a level production strategy in the charts below

Chart 1

Fill out the inventory production amounts and the inventory levels for each month.

The starting inventory is 300 units.

Month		Starting values	1	2	3	4	5	6	Total
Demand		1000	1400	1200	1300	1100	900	6900
Production
Inventory	300

Chart 2

In this plan the company wants to see the effects of finishing with an additional 600 units, making the ending inventory 900 units.

Month		Starting values	1	2	3	4	5	6	Total
Demand		1000	1400	1200	1300	1100	900	7500
Production
Inventory	300

Complete the following tables by calculating the net requirement planned order receipt and planned order release for each week.

Bicycle Assemblies

Lot size to order = 400 units

Lead Time = 1 week

Final Assembly -Bicycles	1	2	3	4
Gross requirements	100	500	200	100
Scheduled receipts		400
Projected available 300
Net requirements
Planned order receipt
Planned order release

Wheel Assemblies

Lot size to order = 800 units

Lead Time = 1 week

2 Wheel Assemblies per bicycle

Wheel assemblies	1	2	3	4
Gross requirements
Scheduled receipts
Projected available 500
Net requirements
Planned order receipt
Planned order release

A company has 4000 different items in inventory and wants to use an ABC analysis for cycle counting purposes. They have the following info to help them

20% of the items can be classified as A items and they are to be cycle counted 1 per month

30% of the items can be classified as B items and they are to be cycle counted every 3 months

C items are to be counted twice a year

The company operates 250 workdays per year

Using the chart below calculate the number of counts per day for each item class and the total counts per day

Classification		Number of Items =4000	Count Frequency per Year	Number of Counts per Year	% of Total Counts	Counts per Day
A
B
C
Total Counts per Year
Workdays per Year
Counts per Day