Demand Forecasting of Fire Valves

In: Other Topics

Submitted By ketansirse
Words 550
Pages 3
Forecasted Method Used: In present forecasting method, the “Executive opinion” is used to determine the forecast of sales and results are not validated by any mathematical/statistical method. * Pressure Valves:
1. The total sales forecasted were optimistic at 53560 against the actual sales of 48159.
2. The Mean Absolute Percentage Error(MAPE) value of total sales of the entire family of pressure valves is around 11.2%, which is reasonably acceptable but the MAPE valves for individual members are very high (reaching up to 1500% for PVB34-420). * Fire Valves:
1. The total sales forecasted were pessimistic at 559 against the actual sales of 580.
2. The Mean Absolute Percentage Error (MAPE) value of total sales of the entire family of fire valves is around -3.5% (negative sign represents pessimistic forecast), which is reasonably acceptable but, MAPE for the individual family member Z3000il is -52.88, which is very high. * Effects:
It may be severely affect the company’s profit :- 1. Over forecasting (optimistic forecasting) may result in more units of product lying in warehouse which blocks the capital as well as there will be space constraints to keep the stocks.

2. Under forecasting (pessimistic forecasting) may result in loss of market share and the customers and thus, leading the bad goodwill to the company. Our Forecast Method: We have used Regression analysis to forecast the sales. We analysed it using time line data for variations like seasonal, cyclic, or random and smoothened it using techniques (Ratio to Trend method and moving average). Finally, we forecasted the sales with the modified data.
Results from Our Method: * Pressure Valves: Regression is performed on the given sales data for various quarters by taking it as a time series data. The pressure…...

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