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Wilkins, a Zurn Company: Demand Forecasting

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Wilkins, A Zurn Company: Demand Forecasting

Session Time:        MW 11:30 AM

Team member names: Amogh Mirikar, Chia-Jung Hsu, Hee- kyoung Han, Rohan Shah, Yashna Shine

  1. How accurate was Wilkins demand forecast for the first quarter of 2005? Use the forecast error and MAPE to calculate forecast accuracy. Calculate the accuracies for the fire valves and PVBs aggregate family of products as well as for each product of both families individually. Note: to disaggregate the product family forecast into the individual products use the planning bill % of Exhibits 3 and 4.

The Forecast overestimates the real demand in every single product. For the first quarter, Connors and Fields have forecasted the sales to be 53,560 units of PVB and 559 units of Fire valves. However, with reference to the Exhibit 2, we find that the actual sales of PVB were less than the forecast i.e. 48,159 units and that of Fire Valves were more than the forecast i.e. 580 units. Hence, Connors and Fields have over forecasted the sales of PVB by 11.21% and under-forecasted the sales of Fire valves by 3.62%.

Aggregate Family of Product: PVBs and Fire Valves

Product

Period

Forecast

Actual

Error, Et

Absolute E

MAPE

(A)

(B)

(C=A-B)

(D=ABS(C))

(E=D/B*100)

PVBs

2005-1Q

53,560

48,159

5,401

5,401

11.21%

Fire Valves

2005-1Q

559

580

-21

21

3.62%

Individual Product in the first Q of 2005: PVBs

Product

Forecast

Actual

Error, Et

Absolute E

MAPE

(A)

(%)

(B)

(C=A-B)

(D=ABS(C))

(E=D/B*100)

12-720

5,677

10.60%

6,237

-558

558

8.95%

34-720

13,444

25.10%

28,020

-14,576

14,576

52.02%

1-720

23,620

44.10%

11,163

12,457

12,457

115.59%

34-420

6,427

12.00%

384

6,043

6,043

1573.70%

1-420

4,392

8.20%

2,357

2,035

2,035

86.34%

Total

53,560

100.00%

48,159

Individual Product in the first Q of 2005: Fire Valves

Product

Forecast

Actual

Error, Et

Absolute E

MAPE

(A)

(%)

(B)

(C=A-B)

(D=ABS(C))

(E=D/B*100)

12-720

119

21.20%

85

34

34

40.00%

34-720

216

38.80%

199

17

17

8.54%

1-720

66

11.80%

140

-74

74

52.86%

34-420

46

8.20%

66

-20

20

30.30%

1-420

112

20.00%

90

22

22

24.44%

Total

559

100.00%

580

  1. What is the current demand forecasting method? Which departments use the demand forecast? What are the consequences, if any, if the forecast is inaccurate?

The current forecasting method uses Planning bill and Forecast Master, which lists the average weekly sales history for each product family by quarter and year since 1999. For each product family, they divide the total quarters in weeks to determine the average weekly sale per quarters. Then they add the expected percentage increase in demand for the next five or six quarters.

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