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Yankee Fork and Hoe Company Case Study
Yankee Fork and Hoe Company Case Study
Case Facts
• Yankee Fork and Hoe Company is a leading producer of garden tools.
• Long time customers are experiencing frequent late shipments because of manufacturing
issues which cannot fulfil customer demand.
• Phil Stanton, is in charge of inventory and is concerned about high costs and keeping the
inventory low.
• Ron Adams, the marketing manager, is concerned about having enough rakes on hand for
timely shipments.
• They both have bias views on how the forecasts should be run.
Questions for analysis
Question 1:
Suggestion:
• Implementation of quantitative method like seasonality technique with
linear trend equation
Suggestion:
• Focus on past demand to project future demand
• Forecasting based on actual demand will help production department to
schedule the production line more effectively.
• Provide a more clear picture to project realistic volume
• Create more sales and revenue for the company when anticipating the
upward trend of demand.
• Prevent losses when anticipated downward trend in the market.
Question 2:
Develop your own forecast for bow rakes for each month of the next year (year 5). Justify
your forecast and the method you used.
1. Naïve method
Naïve forecasts are the most cost-effective and efficient objective forecasting
model, and provide a benchmark against which more sophisticated models can be
compared. For stable time series data, this approach says that the forecast for any
period equals the previous period's actual value.
Conclusion
• The table gives us the Four-Year Demand History for the Bow Rake and the demand
figures are the number of units promised for delivery each month. Hence we could not
forecast using the exponential smoothing and the trend adjusted exponential smoothing.
• There was no linear increasing or decreasing trend that was evident hence trend analysis
for linear trends had to be avoided.
• By analyzing the data provided we could observe a parabolic trend and seasonal
variations with demand increasing during the first 4 months and last 4 months.
• Using all the different techniques for forecasting and taking into considerations the error
associated with each we could conclude that the multiplicative model was the best
forecasting technique.