General Instructions:
Assignment 1
You are to create a set of annual demand forecasts for one year, 2015, using five different forecasting methods as specified later. After reviewing your annual forecast and error values, pick one annual forecast to recommend and distribute the annual forecast into monthly forecasts using the multiplicative seasonal forecasting method. Then, prepare a brief executive summary indicating which forecast method you recommend the company to use for its aggregate planning and your reasons for choosing it. This summary page is to include your recommended forecast results listed by monthly demand and with the annual total demand. Additional pages of your spread sheet file will include a page for each of your five forecasts, an Error summary page which combines error values for all five forecasts and one page for Seasonal Distribution of your demand for your chosen forecast method. Error and other analysis should be included on the page for each individual forecast as well.
A summary Excel template for the executive summary cover page is provided for your use in the Work Assignment 1 folder in Week 5 on Blackboard.
Background:
Your company has just acquired a new subsidiary that produces sun hats and swimsuits. Each product requires about the same amount of labor, time, and materials. All of the managers at the acquired company quit without notice the day your company took possession. You are the person who has been assigned to run this acquisition. Since all of the managers quit, the only planning information you have is historical data, including monthly demand and average annual days of sunshine for the targeted market.
Your task is to a forecast for the total demand for one year, 2015. Because the demand in the past has seasonally varied from month to month, the production organization needs for you to break the final forecasted annual demand down into monthly values so that they can begin scheduling resources and making appropriate purchases of materials from the company’s suppliers.
You have demand and weather data for the last 10 years. Weather forecasters are predicting 198 days of sunshine in the relevant region for 2015. Their weather forecasts have been accurate to plus or minus 10 percent in years past. According to industry experts there is about a 25% chance that the patterns of global consumer demand for 2014 will hold in the future. However there is a 10% chance that demand will be much less (at least 30%) than predicted from previous patterns because of continuing low levels of consumer confidence. And there is a 65% possibility that demand will recover to pre 2014 trends. This information is provided to help you with your executive summary and analysis.
Aggregate Demand Data 2005 – 2014

2005 
2006 
2007 
2008 
2009 
2010 
2011 
2012 
2013 
2014 
JAN 
1393 
1613 
1615 
1777 
1920 
2032 
1912 
2070 
1901 
1668 
FEB 
1551 
1920 
2107 
1779 
2220 
2559 
2627 
2997 
2529 
1948 
MAR 
4572 
5705 
7204 
7667 
8159 
8380 
8742 
11631 
9671 
8447 
APR 
9792 
11301 
12452 
14938 
13491 
14064 
16282 
17966 
18089 
16799 
MAY 
9412 
10000 
9876 
11023 
13216 
13500 
15842 
16587 
16954 
16500 
JUN 
2622 
3243 
3234 
3513 
3954 
4479 
4683 
4641 
4107 
4745 
JUL 
1722 
1910 
2309 
2400 
2727 
3021 
2600 
2730 
2664 
3224 
AUG 
1888 
2272 
2604 
2736 
3412 
4101 
4875 
5182 
4416 
4905 
SEP 
3711 
4464 
4972 
5633 
6774 
7191 
9488 
9795 
8762 
10602 
OCT 
1036 
1016 
1316 
1485 
1693 
1943 
2340 
2487 
2211 
2589 
NOV 
2056 
2600 
2893 
3297 
3889 
4014 
4149 
4364 
4223 
4671 
DEC 
1872 
2123 
2354 
2076 
2157 
2592 
3357 
3938 
3432 
3920 
Note that the copy of the tables are presented as text tables so you can copy and use them with Excel spreadsheet software without having to reenter the data values.

2005 
2006 
2007 
2008 
2009 
2010 
2011 
2012 
2013 
2014 
Annual Days of Sunshine 
249 
245 
261 
264 
269 
278 
285 
186 
245 
250 
Requirements (60 points total):
§ An executive summary (5 points) that tells what forecast you are recommending, and why. Your justification should include qualitative and quantitative evidence to support your choice. The text content of this summary text is not to take more than a half sheet of paper. The summary is to be accompanied below by a table containing the monthly forecast values and total annual demand forecasted by the method you are recommending.
Use the executive summary as your cover sheet – the first sheet of your assignment upload.
§ Five separate forecasts (8 points each) for 2015 using:
ü A simple moving average. (You will choose the number of periods (years) to use.)
ü A weighted moving average. (Use the same number of periods as you SMA forecast and choose the weighting values for each period.)
ü the linear regression analysis method using the causal factor (Days of Sunshine.)
ü the exponential smoothing method (Choose a value for a)
ü Trend Projection with Regression (Choose the best number of periods to use)
ü Error Analysis should be included with each of your forecasts, at a minimum CFE, MAD and MAPE values.
§ For each method you should show:
ü The method/formula you are using, including any constants/parameters used
ü The spreadsheet used for the calculations.
§ Error Analysis (5 points) One page in your spreadsheet should combine error values for all 5 forecast methods.
§ Seasonality (10 points) Choose one annual forecast to recommend and break the annual total into monthly forecast amounts using the multiplicative seasonality method.
Submission Requirements:
§ Your Excel submission file is to be in the following order:
o Executive summary with the table of recommended forecast values on top. This summary is to include your name.
o Spreadsheet for simple moving average
o Spreadsheet for weighted moving average
o Spreadsheet for the linear regression forecast of annual demand (Causal.)
o Spreadsheet for exponential smoothing forecast of annual demand.
o Spreadsheet for Trend Projection with Regression.
o Spreadsheet for Error comparison
o Spreadsheet showing results for seasonal distribution of your one, recommended forecast.
§ Each page must be clearly labeled as to its content (with the exception of the executive summary page whose template is provided.
§ Do not make the reader guess what you are doing – include appropriate explanations on each page (additional comment functions, titles, notes, graphs etc.).
Upload your completed Excel file in Blackboard by 11:59 pm PDT on Sunday, July 26th. Assignments will be accepted up to one week late at a penalty of 25% (prior to grading.)
Suggestions and Tips: