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# The next forecast previous forecast the alpha value

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The next forecast = previous forecast + the alpha value ( ). is calculated as the percentage of the forecast error. Forecast error = actual demand from the previous period less previous forecast. Therefore, the exponential demand for the period follows the following method. The forecast week 6 = 600 units. Alpha 0.1 Forecast week 7 is given by the forecast week 6 plus [the alpha x (the actual week 6 – forecast week 6)]. =600 + [0.1 x (596 - 600)] = 600 + [0.1 x (-4)] = 600 + 0.4 = 599.60. Question 2 Aggregate demand planning strategies Period Aggregate demand 1 630 2 520 3 410 4 270 5 410 6 520 Form the given data, the rate of production per employees will be presented as 500/50 = 50 units per period. The per unit production cost will be 2400/50 which gives 48SR per units.

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QUESTION-ANSWERS 4 Therefore, in the case of the chase strategy, the total production per period is equivalent to the demand during that period. Consequently, the ending inventory is calculated as the production during in that particular period plus the beginning stock less the demand in that period. Similarly, the total cost will be given by the totals of the firing cost, inventory carrying cost, production costs, and hiring cost. Aggregate demand planning using the chase strategy Period 1 2 3 4 5 6 Total Forecast 630 520 410 270 410 520 2,760 Output Regular 350 500 450 250 400 550 2500 Inventory - Beginning inventory 300 20 - 40 20 10 - Ending inventory 20 - 40 20 10 40 - Workers Hired - 3 - - 3 3 - Workers Fired 3 - 1 4 - - - Employee 10 7 10 9 5 8 - Backorder - - - - - - - Costs Regular 16,800 24,000 21,600 12,000 19,200 26,400 120,000 Hiring - 15,000 - - 15,000 15,000 45,000 Firing 15,000 - 5,000 20,000 - - 40,000 Inventory holding 2,000 - 4,000 2000 4,000 4,000 13,000 Backorder - - - - - - - TOTAL COSTS 33,800 39,000 30,600 34,000 45,400 45,400 218,000 Conversely, in the level strategy, the assumption we make for the production level is 460 units per very period. The total cost of level strategy is given by 242600 SR.
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• Spring '16

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