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Supply Chain Problem - Case Study Example

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Summary
According to (Operations Management: Creating Value along the Supply Chain, 2012), Forecasting is paramount in each and every part in operational planning. There are various forcasting methods that can be used with different time structures. In this case problem, the suitable…
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Supply Chain Case Problem
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SUPPLY CHAIN CASE PROBLEM According to (Operations Management: Creating Value along the Supply Chain, , Forecasting is paramount in each and every part in operational planning. There are various forcasting methods that can be used with different time structures. In this case problem, the suitable forecasting method that can be used for bookstore management is Time Series methods.
Time series methods are statistical procedures that use historical data that has been gathered over a phase of time (Operations Management: Creating Value along the Supply Chain, 2012). With this method, the assumption is that the trend that has been occuring in the past will continue even in the other years to come, that is, the demand patterns that have previously occurred over time will continue to do so (Operations Management: Creating Value along the Supply Chain, 2012). The main focus in this method is Time.
Time series methods consist of moving average, linear trend line and exponential smoothing. In this case problem the time series method that would be used for bookstore management is moving average (Operations Management: Creating Value along the Supply Chain, 2012).
Time series methods are most popular since they are somewhat simple to use and comprehend especially for short range forecasting .
TIME SERIES METHOD: MOVING AVERAGE
The following is the historical data provided for the bookstore student computer purchase.
YEAR
COMPUTER SALES
1
518
2
651
3
718
4
921
5
775
6
810
7
856
8
792
9
877
10
693
11
841
12
1089
13
982
14
1183

Based on the data provided, the following graph represents the Moving average for the years.
Therefore, using the historical data provided, the forecast from the excel auto forecast is 592.3186813 units. The moving average method is easy to use and understand though one cannot use it to forecast automatically using excel. The accuracy of moving average is distinct therefore it can be relied upon by organizations for their various operational planning processes .
OTHER APPROPRIATE FORECASTING METHODS
Since there are various forecasting methods, incase one type of the method doesn’t provide precise information, then it is advisable that one tries various forecasting methods until the accurate forecast is obtained .
There are other forecast methods that can be used with the historical data for the bookstore management. For instance, linear trend lines and exponential smoothing can also be used since they are popular for short range, somewhat easy to employ and comprehend .
CONCLUSION
The time series techniques that are used for forecasting are somewhat easy to employ, comprehend, and are less costly depending on the considerable amount of historical data provided.
It should be noted that when forecasting methods are first initiated to individuals, the lack of forecast preciseness comes as a surprise or disappointment to the individuals (Operations Management: Creating Value along the Supply Chain, 2012). Therefore, with more learning and experience, one is able to know that forecasting is not simple and does not provide precise information though with the increase in knowledge and skill, companies that are able to have more defined forecasts have an added advantage agaist their competitors (Operations Management: Creating Value along the Supply Chain, 2012).
Work Cited
Operations Management: Creating Value along the Supply Chain, 7th Edition. (2012). Read More
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