Operations management discussion
In this module, you covered the concepts of forecasting and scheduling to prioritize demand. Without forecasting, most organizations, even small businesses, could quickly find themselves with significant supply and demand mismatches, resulting in excess inventory or the inability to meet customer demand. In the discussion scenario, you are the owner of A Panda in the Kitchen, a bamboo kitchenware company. You currently produce cutting boards, small and large bowls, and drying racks. You have been in business for the last year and have sales data for each item, as shown in Table 1 [XLSX, file size 14.3 KB]. Your brilliant daughter has created a table of forecasted sales models, as shown in Tables 2-5 [XLSX, file size 14.3 KB].
Imagine your brilliant daughter has provided you with forecasting data for various models. It is now up to you to select a model that you will use to forecast sales for the next year, so that you can purchase raw materials for your products (you buy in an annual batch to save shipping costs).
Answer the following:
Which forecasting model will you use? Justify your choice.
What are the possible sources of error in your selected model? (i.e. – last year was a bull market; therefore, people had less disposable income…).
Does your selected model meet the “good forecast” criteria from Chapter 15 of Operations Management? Explain your answer.