Answer Happy

M&L Manufacturing makes various components for printersandcopiers. In addition to supplying these items to a majormanufacturer,the company distributes these and similar items to officesupply stores and computer stores as replacement parts forprinters and desktop copiers. In all, the company makes about20 different items. The two markets (the major manufacturerand the replacement market) require somewhat differenthandling.For example, replacement products must be packagedindividually whereas products are shipped in bulk to themajormanufacturer.The company does not use forecasts for production planning.Instead, the operations manager decides which items toproduceand the batch size, based on orders and the amounts ininventory.The products that have the fewest amounts in inventory getthehighest priority. Demand is uneven, and the company hasexperiencedbeing overstocked on some items and out of others. Beingunderstocked has occasionally created tensions with themanagersof retail outlets. Another problem is that prices of rawmaterialshave been creeping up, although the operations managerthinks that this might be a temporary condition.Because of competitive pressures and falling profits, themanagerhas decided to undertake a number of changes. One changeis to introduce more formal forecasting procedures in ordertoimprove production planning and inventory management.With that in mind, the manager wants to begin forecasting fortwo products. These products are important for severalreasons.First, they account for a disproportionately large share ofthecompany’s profits. Second, the manager believes that one oftheseproducts will become increasingly important to future growthplans; and third, the other product has experienced periodicoutof-stock instances.The manager has compiled data on product demand for thetwo products from order records for the previous 14 weeks.Theseare shown in the following table.Week Product 1 Product 21 50 402 54 383 57 414 60 465 64 426 67 417 90* 418 76 479 79 4210 82 4311 85 4212 87 4913 92 4314 96 44*Unusual order due to flooding of customer's warehouse.
Questions2. Prepare a weekly forecast for the next four weeks for eachproduct.Briefly explain why you chose the methods you used. ( Hint:For product 2, a simple approach, possibly some sort ofnaive/intuitive approach, would be preferable to a technicalapproachin view of the manager’s disdain of more technical methods.)