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Using the simple exponential smoothing method (SESM), compute the forecasts for the February 2022 to March 2023 period. Use a smoothing constant of 0.2 and assume a forecast of 7 000 units for January 2022. Compute the three-month weighted moving average (3MWMA) forecasts for the April 2022 to March 2023 period, using weights of 0.2, 0.3, and 0,5 (oldest data to newest data, respectively). Using the forecasts calculated for the April 2022 to March 2023 period, calculate the Mean Absolute Percentage Error (MAPE) of the simple smoothing method and the MAPE of the three-month weighted moving average method. Which of the two methods should the demand planner use to forecast the volume of export of the next-Gen Ranger. Explain why?

Purchasing and Supply Chain Management

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...

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Using the simple exponential smoothing method (SESM), compute the forecasts for the February 2022 to March 2023 period.

Use a smoothing constant of 0.2 and assume a forecast of 7 000 units for January 2022.

Compute the three-month weighted moving average (3MWMA) forecasts for the April 2022 to March 2023 period, using weights of 0.2, 0.3, and 0,5 (oldest data to newest data, respectively).

Using the forecasts calculated for the April 2022 to March 2023 period, calculate the Mean Absolute Percentage Error (MAPE) of the simple smoothing method and the MAPE of the three-month weighted moving average method.

Which of the two methods should the demand planner use to forecast the volume of export of the next-Gen Ranger. Explain why?

INFORMATION
The data in the table below shows the number of Next-generation Rangers exported to over 100 countries through Durban's roll-on
roll-off (RORO) vehicle terminal during 2022 and the first quarter of 2023.
Month
Jan- Feb Mar Apr
22 22 22 22
May- Jun- Jul-
22 22 22
Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar-
22 22
22 22 23 23 23
22
Export, 7000 9000 8600 9500 10200 12000 11000 12500 12000 12600 12800 13000 10800 12600 14000
units
A demand planner wants to compare the relative performance of the weighted moving average method against the simple
exponential method in forecasting the volume of export of the next-gen Ranger from the Silverton Assembly Plant.

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?

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