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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:

Qty in NOS:–

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Period (Year & Quarter)

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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):

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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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