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# MGT613 - Production / Operations Management GDB #01

Dear Students,

This is to inform that Graded Discussion Board (GDB) No. 1 would be opened on 16th of November, 2016; and last date for posting your discussion comments/ solution will be 22nd of November, 2016.

Topic/Area

“Forecasting”

PROBLEM:

Mr. Ahsan, the production manager of XYZ Company, wants to use a Moving-Average method to forecast the future demand; but not sure whether a 3-period moving-average would yield better forecasts or a 4-period moving-average!

The demand data of last 12 months have been given in following table:

 Month Demand (1000 SKUs) 1 20 2 18 3 21 4 25 5 24 6 27 7 22 8 30 9 23 10 20 11 29 12 22

You are required to suggest Mr. Ahsan more suitable forecasting method by calculating and analyzing:

1. 3-period moving average forecasts for months 4 – 12 & Mean Absolute Deviation (MAD)
2. 4-period moving average forecasts for months 5 – 12 & Mean Absolute Deviation (MAD)

NOTE:

• Show the forecasts along with necessary calculations in tabular form.
• Compare MAD for both methods and clearly mention your suggested method.
• You may solve the problem in MS Excel and copy-paste the table in GDB comments.

IMPORTANT INSTRUCTIONS:

• Your discussion must be based on calculations.
• The GDB will open and close at above specified date and time. Please note that no grace day or extra time will be given for posting comments on GDB.
• Use the font style “Times New Roman” and font size “12”.
• Your answer should be relevant to the topic i.e. no definitions & theoretical explanations are required.
• Do not copy or exchange your answer with other students. Two identical/ copied comments will be marked Zero (0) and may damage your grade in the course.
• Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references.

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Views: 2094

### Replies to This Discussion

you dont have any idea about gdb

how to put this formula

see lecture no 9 & 10

Our main purpose here discussion not just Solution

We are here with you hands in hands to facilitate your learning and do not appreciate the idea of copying or replicating solutions.

 Student's Message:

Respected Sir

What is the procedure of MAD calculation? Give me an example for my understanding.

Regards

We use following formula to calculate MAD:

Where

Error = Actual Demand – Forecast

Example: In following table, actual demand and forecasts are given for 4 periods. We’ll calculate Error, Absolute Error and then MAD.

 Period Actual Demand Forecast Error |Error| 1 104 100 4 4 2 94 100 -6 6 3 99 100 -1 1 4 105 100 5 5 ∑ (Total) 16

So,

MAD = 16 / 4 = 4

Dear Students Don’t wait for solution post your problems here and discuss ... after discussion a perfect solution will come in a result. So, Start it now, replies here give your comments according to your knowledge and understandings....

1000skus will be multiplied with all respective demands
 Student's Message:
 Subject: ques Respected teacher, Assalaam O Alaikum,      In gdb, we have to calculate simple moving average or weighted moving average?? Moreover, it is writen as "demand (1000 SKU)". Does it mean that the demand is in thousands?? Kindly clarify.Looking forward to your cooperative reply. Instructor's Reply: If there were Weighted Average required, it would have been mentioned and/or weights would have been given and/or you would have been asked to assume suitable weights. Here, simple Moving Average has been asked. Yes, 1000 SKUs means the numbers given in table show Thousand Stock Keeping Units; e.g., 20 means 20000 SKUs.

just change format

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