Read through the Case Study entitled "M&L Manufacturing" in Chapter 3 of your textbook. Examine the historical trend this company has experienced for the two products discussed. Prepare weekly forecasts for the next four weeks for both products, describe the forecasting method you chose and explain why that forecasting method is best suited to the scenario. Explain why you did, or did not, choose the same forecasting method for each product. What are the benefits of using a formalized approach to forecasting these products?

M&L MANUFACTURING MEL Hanutacthing makes various components for printers and copiers. In addition to supptying these items to a major manufac- turer, the company disti'itrutes these and similar items to otce suppty stores and computer stores as rep-tacement parts for print- ers and desktop copiers. 1n all, the company makes about 2|} dif- ferent items. The two markets [the major manutacturer and the repiacernent market]- reguire somewhat ditterent handling. For example, replacement products must be packaged 'I'Idividually whereas products are shipped in hull: to the major manufacturer. The company does not use forecasts for production planning. Instead, the operations manager decides which items to produce and the hatch size, based on orders and the amounts in inventory. The products that have the fewest amounts in inventory get the highest priority. Demand is urleyen, and the company has experi- enced heing overstocked on some items and out of others Being understocked has occasionalty created tensions with the manag- ers at retail outlets. Another problem Is that prices of raw mate- rials have [teen creeping up. although the operations manager thinks thatthis might be a temporary condition. Because o1 competitive pressures and faliing prots, the man- ager has decided to undertedre a numher of changes. ne change is to introduce more formal forecasting procedures in order to improve production planning and inventory management. Widtthatin mirld,1he manager wantsto hegin forecastingfortwo products. These products are important for several reasons. rst. they account for a dimoportionately large share of the company's prots. 5ecm1d,the manager believes thatone ofthese producls wil hecome increasingly importantto future growth plans; and third,the other product has experienced periodic out-ot-stock instances. the manager has complied data on product demand for the two products from order records for the previous 14 weeks. These are shown in the following hie. 134 Heal: Product 1 Product 2 1 5t] 40 2 54 3B 3 5? 41 a Bit 45 5 E4 42 6 E? 41 2 El" 41 3 16 4? 9 19 42 1t] E2 43 11 35 42 12 E? 49 13 32 43 14 Eli 4-4 'Unusual order due to ooding of customer's warehouse. Questions '1. What are some ofthe potential benefits ofa more formatted approach to forecasting? 2. Prepare a weekly forecasttor the next four weeks for each product. Briey expiain why you chose the methods you used. Hot: For product 2, a simple approach, possibly some sort of naivelintljliye approach, would be preferable to a technical approach in view otthe manager's disdain of more technical methods}