Name- Ashutosh Sangle

PROJECT SUBMISSION

Task 1
• Forecasting Method: 3-Period Weighted Moving Average
When it comes to predicting demand for the upcoming six months, a viable approach is
the employment of the 3-Period Weighted Moving Average method. This strategy
involves the allocation of varying degrees of significance to historical data points, with a
stronger emphasis on the most recent information. Given the susceptibility of the
provided demand data to recent alterations, this technique is better suited for the task at
hand.

• Justification:
The Weighted Moving Average method proves its suitability by virtue of its ability to
swiftly adapt to shifts in demand patterns. It adeptly captures recent trends while still
respecting the relevance of historical data. In this method, the option to attribute greater
weight to the most current months acknowledges the fluid nature of consumer
preferences and technological advancements. However, it's imperative to acknowledge
that this method assumes a degree of continuity in past trends as it looks into the future.

Task 2

● The formula used for forecasting demand:

» January Forecast = ((Dec Actual)* 50%) + ((Nov Actual)*30%) +((Oct Actual)* 20%)
» February Forecast = ((Jan Actual)* 50%)+((Dec Actual)* 30%)+((Nov Actual)* 20%)
» March Forecast = ((Feb Actual)* 50%)+((Jan Actual)*30%)+((Dec Actual)* 20%)
» April Forecast = ((March Actual)* 50%)+((Feb Actual)* 30%)+((Jan Actual)*20%)
» May Forecast = ((April Actual)* 50%)+((March Actual)* 30%)+((Feb Actual)* 20%)
» June Forecast = ((May Actual)* 50%)+((April Actual)* 30%)+((March Actual)* 20%)
 ● The demand forecast for the next six months is shown in the table below.

Month Smartphones (Forecast) Laptops (Forecast) Smartwatches (Forecast)

Jan 2110 1055 359

Feb 2145 1073 364

Mar 2166 1083 366

Apr 2148 1074 364

May 2153 1076 365

Jun 2154 1077 365

Task 3
● The formula used for calculating forecast errors:
Forecasting error = (Actual demand - Forecast demand) X 100 / Actual demand

● The forecast errors for the six months are shown in the table below

Month Smartphones Laptops Smartwatches

Jan -32 -40 -39

Feb -30 -24 -24

Mar -38 -23 -46

Apr -23 -16 -70

May -12 -8 -82

Jun -6 2 -86

Task 4
● The formula for calculating MAPE:
 MAPE = Ʃ l(Actual-Forecast)l / Ʃ Actual

● MAPE for all product categories for the six months:

Month Smartphones Laptops Smartwatches

Jan 1.99% 5.26% 14.91%

Feb 1.91% 4.02% 11.65%

Mar 2.08% 3.57% 13.94%

Apr 1.88% 3.12% 18.64%

May 1.63% 2.65% 23.14%

Jun 1.41% 2.24% 26.61%

● The formula for calculating Bias:

Bias = Total Variances (Forecast - Actual) / Total Actual

● Bias for all product categories for the six months:

For example:
▪ (Forecast – Actual) = 2110-1600 = 510 for Smartphones
▪ 510/10528 X 100 = 4.8% for Smartphones.
Month Smartphones Laptops Smartwatches

Jan 4.8% 5.4% 7.1%

Feb 4.7% 3.8% 5.1%

Mar 5.7% 3.7% 8.2%

Apr 3.8% 2.7% 10.6%

May 2.2% 1.4% 11.7%

Jun 1.1% -0.4% 12.0%

Total Variance 2347 918 771

Total Actual 10528 5520 1411

 BIAS=Total Variance (Forecast-Actual) X100
Total Actual 22.3% 16.6% 54.6%

Task 5

▪ Recommendation for Smartphones:

The analysis indicates a consistent tendency to overestimate smartphone demand, particularly

in the latter part of the year. To tackle this issue, we propose the following actions:

1. Advanced Forecasting Model: Implement a more advanced forecasting model for

smartphones that can adapt to shifting demand patterns. Explore machine learning algorithms to
accurately capture the nonlinearities and seasonal variations in smartphone demand.

2. Regular Model Updates: Continuously update the forecasting model to incorporate the
latest data and market trends. Employ real-time data integration and automated model retraining
to minimize forecasting errors.

3. Demand Sensing: Introduce demand sensing technologies to collect real-time data from
diverse sources, including social media and point-of-sale data. This will enhance demand
visibility, enabling agile responses to changing consumer preferences.

▪ Recommendation for Laptops:

The analysis reveals a positive bias in laptop forecasts along with significant errors. To address
this, we suggest the following steps:

1. Demand Segmentation: Further segment the laptop market based on specific

configurations and user requirements. Tailor production and inventory management to
accommodate diverse demand patterns for different laptop models.
2. Advanced Inventory Optimization: Invest in advanced inventory optimization tools that
consider demand variability, lead times, and demand segmentation. These tools can provide
precise safety stock levels and reorder points, mitigating the risk of overstock or stockouts.

3. Supplier Collaboration: Foster closer collaboration with laptop component suppliers to

enhance lead times and reduce supply chain variability. Cultivate strategic partnerships with key
suppliers to improve demand forecasting and coordination.

▪ Recommendation for Smartwatches:

The analysis highlights significant errors and a positive bias in smartwatch forecasts. To address
this issue, we recommend the following actions:

1. Market Research and Product Development: Invest in comprehensive market research to

gain insights into evolving consumer preferences for smartwatches. Utilize these insights to
guide product development and innovation in alignment with market trends.

2. Dynamic Pricing and Promotions: Implement dynamic pricing strategies and targeted
promotions for smartwatches. Adjust pricing based on demand trends and introduce time-limited
promotions to stimulate sales during periods of lower demand.

3. Supplier Diversification: Diversify the supplier base for critical smartwatch components to
reduce the risk of supply chain disruptions. Explore partnerships with multiple suppliers to
ensure a steady supply of essential components.

By leveraging advanced forecasting techniques, refining inventory management, enhancing

supplier collaboration, and staying attuned to market trends, TechHub Electronics can bolster
the resilience of its supply chain, minimize lead times, and enhance overall performance.