PROJECT SUBMISSION

Task 1

● I advise using the exponential smoothing approach for predicting short-term demand for
the following six months. This technique is appropriate for items with constantly
changing customer tastes and technology breakthroughs because it provides more weight
to recent data and is, therefore, more sensitive to shifts.
● Justification: Exponential Smoothing gives more weight to current data, which is
important in a field that moves quickly. According to the degree of sensitivity of the
supplied data to recent modifications, it is assumed that the most current sales
information is the best predictor of upcoming sales.
● Assumption: Exponential smoothing assumes that historical demand data accurately
predicts future demand trends. This assumption might not be entirely correct in an
industry that is moving quickly, but the method's sensitivity to current data helps to
lessen this drawback.
●

Task 2
● The formula used for forecasting demand: ESF: Alpha*Actual demand+1-Alpha*forecast
demand

● The demand forecast for the next six months is shown in the table below

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

Jan 2044.92 1023.10 352.48

Feb 2121.44 1061.17 360.74

Mar 2175.01 1087.82 366.52

 Apr 2212.51 1106.47 370.56

May 2238.76 1119.53 373.39

Jun 2257.13 1128.67 375.37

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

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

Month Smartphones Laptops Smartwatches

Jan 444.92 268.10 93.48

Feb 472.44 196.17 68.74

Mar 606.01 210.82 116.52

Apr 462.51 183.47 156.56

 May 318.76 119.53 173.39

Jun 217.13 28.67 179.37

Task 4
● The formula for calculating MAPE: MAPE = Σ (|actual – forecast| / |actual|)
● MAPE for all product categories for the six months:

Month Smartphones Laptops Smartwatches

Jan 27.81 35.51 36.09

Feb 28.65 22.68 23.54

Mar 38.62 24.04 46.61

Apr 26.43 19.88 73.16

May 16.60 11.95 86.70

 Jun 10.64 2.61 91.52

● The formula for calculating Bias: Total Variances (Forecast- Actual)/Total Actual
● Bias for all product categories for the six months:

Month Smartphones Laptops Smartwatches

Jan 0.042 0.0486 0.0662

Feb 0.045 0.0355 0.0487

Mar 0.058 0.0382 0.0825

Apr 0.044 0.0332 0.1109

May 0.030 0.0217 0.1228

Jun 0.021 0.0052 0.1271

Task 5

Based on the analysis of the forecast errors and metrics:

 ➢ Recommendation for smartphones: Implement risk mitigation and diversify suppliers.
It's essential to diversify smartphone component suppliers and build trusting relationships with
several vendors given the high demand volatility and potential supply chain disruptions in the
electronics industry. The risk of single-source dependence, which can cause production delays and
shortages during unforeseen occurrences like natural catastrophes or geopolitical upheavals, will
be reduced by this technique.

➢ Strategy to Adopt
• Determine the crucial smartphone production components and evaluate
the concentration of suppliers for each.
• To lessen the effects of local disruptions, procure vital supplies from
several vendors, ideally located in different geographic areas.
• Create backup plans and risk-reduction methods, such as buffer stocks
and alternate sourcing choices, to swiftly handle supply chain
interruptions.
➢ Recommendation For Laptops: Implement Advanced Inventory Management
Techniques
Advanced inventory management strategies must be used if we want to better control demand
changes and shorten lead times for laptops. Due to their complicated production procedures,
laptops frequently have longer lead times, making it difficult to react swiftly to unexpected demand
spikes.
➢ Strategy to Adopt
• Just-In-Time (JIT) inventory management techniques should be used to reduce carrying
costs while maintaining product availability.
• Make use of tools for demand sensing and shaping to more accurately predict and influence
consumer demand, enabling more proactive inventory management.
• By taking into account variables like seasonality, supplier dependability, and transportation
lead times, safety stock levels can be optimized.
➢ Recommendation For Smartphones Enhance Demand Collaboration with Retailers

•Compared to smartphones and laptops, the demand for smartwatches is more

consistent over the course of the year. In order to better coordinate production with
actual demand, it is essential to build stronger channels of collaboration and
communication with merchants.
➢ Strategy to Adopt

• To communicate demand projections and inventory information with important retailers,

implement a vendor-managed inventory (VMI) system or collaborative planning,
forecasting, and replenishment (CPFR).
• Regularly examine sales data and work with merchants to modify production schedules in
accordance with real-time demand insights.
• To increase prediction accuracy and lessen concerns with overstocking or understocking,
think about providing incentives to retailers for prompt and accurate demand information
sharing