OPSCMProject Ani

PROJECT SUBMISSION
Task 1
 Method of forecasting:
To project demand for TechHub Electronics over the next six months, I advise using a
time series forecasting technique, particularly the Exponential Smoothing approach,
similar to the Holt-Winters method (a short-term projection). This method is helpful for
short-term projections and works particularly well with data that exhibits seasonality and
trends, which is common in the electronics industry because of the industry's cyclical
product release cycles, seasonal sales, and holidays.
● Justification for the choice of method:
Exponential Smoothing method
Seasonality: Sales of laptops, smartphones, and smartwatches appear to be seasonal,

increasing during specific months (such as the holiday shopping season), based on the
demand data provided. Since the Exponential Smoothing technique can recognize and
include seasonality in the projections, it's an excellent choice.
Trend: Compared to the prior year, the data also shows an overall rising trend in sales
for all three product categories. The trend component of the exponential smoothing
method is essential in a market that is changing quickly because it can adapt to
changing sales trends.
Data Sensitivity: The exponential smoothing method is well-suited to detect and

respond to current shifts in demand patterns since it assigns distinct weights to more
recent and older observations. The provided data is vulnerable to recent changes, as
previously mentioned.
Assumption: It is crucial to assume that historical tendencies will continue to hold when
using the exponential smoothing strategy. This indicates that we expect the pattern and
seasonality observed during the preceding 12 months to persist for the next six months.
While this assumption may not always hold in a sector as dynamic as electronics, it
provides a solid starting point for near-term forecasting.
Task 2
● The formula used for forecasting demand:

The formula used for forecasting demand: ESF: Alpha*Actualdemand+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:

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:
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
● Recommendations:
1. Smartphones:
Recommendation: Diversify Suppliers and Implement Risk Mitigation
Justification: Given the extreme demand volatility and potential disruptions to the supply
chain in the electronics industry, it is imperative to diversify the suppliers of smartphone
components and establish strong relationships with several vendors. The risk of single-source
dependence will be lessened by using this strategy, which could lead to production delays and
shortages in the event of unanticipated events like natural catastrophes or geopolitical upheavals.
Actions to Take:
• Determine which essential components are utilized to make smartphones and assess the
concentration of suppliers for each.
• To mitigate the effects of local disruptions, obtain necessary parts from many vendors, ideally
spread across multiple regions.
• To promptly handle supply chain disruptions, and develop backup plans and risk-reduction
strategies, such as buffer stockpiles and alternate sourcing options.
2. Laptops:
Recommendation: Implement Advanced Inventory Management Techniques
Justification: To effectively control demand changes and shorten lead times for laptops, modern
inventory management strategies must be used. Because of their intricate production processes,
laptops frequently have lengthier lead times, which makes it difficult to react swiftly to abrupt
surges in demand.
Actions to take:
 Adopt Just-In-Time (JIT) inventory management techniques to ensure product
availability and reduce carrying costs.
 To better predict and shape consumer demand and enable more proactive
inventory management, use solutions for demand sensing and demand shaping.
 Maximize safety stock levels by taking lead times for shipping, seasonality, and
supplier dependability into account.
3. Smartwatches:
Recommendation: Enhance Demand Collaboration with Retailers
Justification: Throughout the year, the demand for smartwatches is more consistent than that of
laptops and smartphones. To better align manufacturing with actual demand, it is imperative to
build improved channels of collaboration and communication with retailers to optimize the
smartwatch supply chain.
Actions to take:
 Collaborate in Planning, Forecasting, and Replenishment (CPFR) or Vendor Managed
Inventory (VMI) systems with major retailers to exchange inventory data and demand
projections.
 Examine sales data regularly and work with retailers to modify production schedules in
light of current demand insights.
 To increase prediction accuracy and lessen the problems associated with overstocking or
understocking, think about providing retailers with incentives for promptly and
accurately communicating demand information.

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PROJECT SUBMISSION

● Justification for the choice of method:

Exponential Smoothing method

Seasonality: Sales of laptops, smartphones, and smartwatches appear to be seasonal,

Data Sensitivity: The exponential smoothing method is well-suited to detect and

● The formula used for forecasting demand:

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

● The formula used for calculating forecast errors:

Forecasting error = (Actual demand - forecast demand) * 100 / actual demand

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

MAPE = Σ(|actual – forecast| / |actual|)

● MAPE for all product categories for the six months:

Month Smartphones Laptops Smartwatches

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:

● Bias for all product categories for the six months:

Month Smartphones Laptops Smartwatches

Jan 0.042 0.0486 0.0662

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

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