Scribd
Upload
297 views5 pages

Chinese Pharmaceuticals Summary

Chinese Pharmaceuticals has been forecasting demand for its Noto37 product using exponential smoothing. Using an alpha of 0.4 produced a MAD of 690.248 and MAPE of 10.83%, while an alpha of 1 produced a lower MAD of 408.333 and MAPE of 6.4%. A graph of actual sales versus the two forecasts showed the alpha 1 forecast aligned more closely with actual sales. Therefore, an alpha of 1 is recommended for more accurate forecasting.

Uploaded by

Greggi Rizky
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
297 views5 pages

Chinese Pharmaceuticals Summary

Chinese Pharmaceuticals has been forecasting demand for its Noto37 product using exponential smoothing. Using an alpha of 0.4 produced a MAD of 690.248 and MAPE of 10.83%, while an alpha of 1 produced a lower MAD of 408.333 and MAPE of 6.4%. A graph of actual sales versus the two forecasts showed the alpha 1 forecast aligned more closely with actual sales. Therefore, an alpha of 1 is recommended for more accurate forecasting.

Uploaded by

Greggi Rizky
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

Greggi Rizky E 29120468 YP64C

Chinese Pharmaceuticals (HK) Limited Effective Forecasting for Optimal Inventory Management

Introduction

Chinese pharmaceuticals, headquartered in Hong Kong, has already been attempting to forecast potential demand for their
Noto37 product line, since it’s their most popular product. By using exponential smoothing method with α=1, then we get:

YY-MM Period Sales Forecast


t A α = 0,4 α=1
Jul-09 1 3303 3303 3303
Aug-09 2 3360 3303 3303
Sep-09 3 3828 3326 3360
Oct-09 4 4257 3527 3828
Nov-09 5 5508 3819 4257
Dec-09 6 5205 4494 5508
Jan-10 7 5190 4779 5205
Feb-10 8 5058 4943 5190
Mar-10 9 5307 4989 5058
Apr-10 10 4563 5116 5307
May-10 11 4512 4895 4563
Jun-10 12 4434 4742 4512
Greggi Rizky E 29120468 YP64C

Jul-10 13 4440 4619 4434


Aug-10 14 5178 4547 4440
Sep-10 15 5277 4800 5178
Oct-10 16 6411 4991 5277
Nov-10 17 7308 5559 6411
Dec-10 18 7275 6258 7308
Jan-11 19 7065 6665 7275
Feb-11 20 7497 6825 7065
Mar-11 21 7326 7094 7497
Apr-11 22 6207 7187 7326
May-11 23 5976 6795 6207
Jun-11 24 5874 6467 5976
Jul-11 25 5970 6230 5874
Aug-11 26 6666 6126 5970
Sep-11 27 7575 6342 6666
Oct-11 28 8367 6835 7575
Nov-11 29 9051 7448 8367
Dec-11 30 9696 8089 9051
Jan-12 31 9594 8732 9696
Feb-12 32 9084 9077 9594
Mar-12 33 8955 9080 9084
Apr-12 34 8235 9030 8955
Greggi Rizky E 29120468 YP64C

May-12 35 8055 8712 8235


Jun-12 36 7767 8449 8055

With the MAD and MAPE value :

Alpha MAD MAPE


Value
0,4 690,248 10,83%
1 408,333 6,4%

Using this formula to count the MAD and MAPE value:

MAPE = (1/n) * Σ(|actual – forecast| / |actual|) * 100

where:

• Σ – a fancy symbol that means “sum”


• n – sample size
• actual – the actual data value
• forecast – the forecasted data value
Greggi Rizky E 29120468 YP64C

MAD = (Σ |xi – x|) / n

• Σ – just a fancy symbol that means “sum”


• xi – the ith data value
• x – the mean value
• n – sample size

Exponentisal Smoothing Method


12000

10000

8000

6000

4000

2000

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun-
09 09 09 09 09 09 10 10 10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 11 11 11 11 11 11 12 12 12 12 12 12

Sales A Forecast α = 0,4 Forecast α = 1


Greggi Rizky E 29120468 YP64C

Conclusion

From the calculation of the error rate and plotting of the demand graph to forecast, it can be concluded that the level of forecast
accuracy more fits and will be better if company use the exponential smoothing method with Alpha = 1.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy