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Bharat Steel Co.
Mr.Sinha, Operations Manager at Bharat Steel Co has analysed the company’s production pattern for one product in order to be able to estimate the demand for the next year. Demand data for last four years were collected and are as follows:
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|
Period (Year & Quarter) |
Cupboard |
|
2016 Q1 |
600 |
|
Q2 |
550 |
|
Q3 |
500 |
|
Q4 |
650 |
|
2017 Q1 |
700 |
|
Q2 |
600 |
|
Q3 |
500 |
|
Q4 |
750 |
|
2018 Q1 |
750 |
|
Q2 |
650 |
|
Q3 |
550 |
|
Q4 |
780 |
|
2019 Q1 |
780 |
|
Q2 |
650 |
|
Q3 |
550 |
|
Q4 |
518 |
Mr.Sinha applied different quantitative methods of forecasting on the above and obtained the following summary of results (including his estimations where required):
Cupboard
|
Regression line |
559+(10.78*period) |
||
|
Coefficient of determ R^2 |
0.22 |
||
|
Significance F |
0.06 |
||
|
F |
4.04 |
||
|
Intercept |
559 |
||
|
Coefficient for Period |
10.78 |
||
|
Pvalue for Period |
0.064 |
||
|
(1) Predictions for 4 quarters (using linear regression) |
742, 753, 764, 775 |
||
|
(2) Estimates using 4p- moving average for 4 qtrs |
708, 690, 700, 737 |
||
|
(3) Estimates using exponential smoothing (0.3) for 4qtrs |
708, 708, 708, 708 |
||
Q1.Study the above demand pattern carefully and also summary figures for the different methods of forecasting applied. Analyse which method is likely to give the best results. Is there a better method of forecasting for the product than given above? If yes, discuss briefly and estimate results for your suggested method for 4 quarters.
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