Week 3 Bonus Activity DEMAND FORECASTING CASE STUDY After reviewing the forecasting demonstration and looking over the slides, complete the following case activity and transfer your answers to the appropriate questions in the Canvas activity quiz. You have been hired as a demand planning intern for Hawaiian Island Creations (HIC). They want you to develop a forecast for their HIC Papanui style of sunglasses. The goal is to determine how many pair they will produce to meet retailer demand in July 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 Summer Break '21 in major vacation destinations. Month January 2021 February 2021 March 2021 April 2021 May 2021 June 2021 Forecast 4,000 4,200 4,500 4,800 5,000 5,300 Demand 3,300 3,900 4,300 4,200 5,400 5,800 Other useful information about the company: Internal production capacity = 4,500 units per month Historical forecasting error = $ 300 units per month Evaluate the capacity of HIC's internal production capacity to serve demand. Calculate capacity utilization for April 2021: Based on HIC's available resources, do they have enough internal production capacity to serve demand in June 2021? Calculate the demand forecast for July 2021 using the methods listed below. Work with the data provided in the table on the previous page. Three-Month Simple Moving Average Three-Month Weighted Moving Average Weight factors t-1 = .6 t-2=3 t-3=1 Exponential Smoothing Alpha smoothing constant = .7 Which method do you recommend that the company use when forecasting July 2021 demand? Explain why you selected this method. Week 3 Bonus Activity Evaluate the company's forecast accuracy over the last three months. Mean Absolute Deviation Based on their historical forecasting error, how well is HIC doing in terms of forecast accuracy