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Forecasting Dilemma at Dstore

CASELET, OPERATIONS MANAGEMENT
ET Cases, 2 pages
AUTHOR(S) : R. Muthukumar and Dr. Nagendra V. Chowdary

Case Preview

Forecasting Dilemma at Dstore

Bangalore-based John Paul (John) established Dstore (P) Ltd. (Dstore), a pen drive manufacturing company, in 2011. John had joined Moserbaer, a well-known mass storage devices manufacturing company, in 2006, after completing his graduation. Within the 5 years at Moserbaer he had acquired enough knowledge in manufacturing and marketing of pen drives. As he had a dream of becoming an entrepreneur and was confident about his abilities and skills, John launched a store in his native place – Bangalore. He marketed his products through retailers and online sellers he had befriended while at Moserbaer.

Within a year, Dstore started manufacturing a broad line of pen drives for the Indian consumers. After receiving a number of customized orders from gifting solutions companies, by the end of 2013, the company started manufacturing fancy pen drives too, positioned as gift articles...........

Assignment Questions

I. What are the available forecasting methods? Which method would be most suitable for Ram?

II. Based on your analysis prepare a report, based on the same criteria, to be presented to John Paul.

III. .............

Exhibit

Exhibit I: Sales History of Dstore (in units)

Teaching Note Preview

Forecasting Dilemma at Dstore

 

Prerequisite Conceptual Understanding

  • • Jay Heizer, et al., “Chapter 3: Forecasting”, Operations Management, 9th Edition, Pearson Education, 2008

 

Synopsis

This caselet can be used to facilitate understanding of the concept of Forecasting in Operations Management. Bangalore-based Dstore (P) Ltd. (Dstore) is a growing pen drive manufacturer. The company’s founder John Paul (John) faces a typical inventory problem i.e., overstock or shortage of few items because of inaccurate forecasting of demand. Since the inception, John had used the previous month’s sales as the base to forecast for the next month and planned production accordingly. Nevertheles, Dstore was continuously facing the problem of overstock or shortage. To avoid this problem, John wanted accurate forecasting and he gave this assignment to the new joinee, Ram Charan (Ram). Ram wanted to do the forecasting as accurately as John expected it to be. Can Ram find a solution to the problem at Dstore? Will he be able to identify the apt method of forecasting suitable for Dstore?

Expected Learning Outcomes

  • • Methods of forecasting and time horizons
  • • Suitable forecasting method for Dstore
  • •· Forecast accuracy

 

Assignment Questions

  • I. What are the available forecasting methods? Which method would be most suitable for Ram?
  • II. Based on your analysis prepare a report, based on the same criteria, to be presented to John Paul.
  • III. ....................

 

Teaching Plan

The Teaching Note follows the specific Teaching Plan [Annexure (TN)-I]............

Exhibits

Exhibit (TN)-I: Forecasting Using 3-month Moving Average

Exhibit (TN)-II: Forecasting Using 3-month Weighted Moving Average

Exhibit (TN)-III: Exponent Smoothing Forecast (2014)

Exhibit (TN)-IV: Measures of Error for 3-month Moving Average

Exhibit (TN)-V: Measures of Error for 3-month Weighted Moving Average

Exhibit (TN)-VI: Trend Analysis

Exhibit (TN)-VII: Trend Analysis on Year basis

Exhibit (TN)-VIII: Computation of Seasonal Indices

Exhibit (TN)-IX: Computation of Seasonal Forecast

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Abstract


This caselet can be used to facilitate understanding of the concept of Forecasting in Operations Management. Bangalore-based Dstore (P) Ltd. (Dstore) is a growing pen drive manufacturer. The company's founder John Paul (John) faces a typical inventory problem i.e., overstock or shortage of few items because of inaccurate forecasting of demand. Since the inception, John had used the previous month's sales as the base to forecast for the next month and planned production accordingly. Nevertheless, Dstore was continuously facing the problem of overstock or shortage. To avoid this problem, John wanted accurate forecasting and he gave this assignment to the new joinee, Ram Charan (Ram). Ram wanted to do the forecasting as accurately as John expected it to be. Can Ram find a solution to the problem at Dstore? Will he be able to identify an apt method of forecasting suitable for Dstore?



Pedagogical Objectives

  • To understand the methods of forecasting and time horizons
  • To discuss and analyze a suitable forecasting method for Dstore
  • To understand the forecast accuracy



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- Caselet
- Teaching Note (**ONLY for Academicians)


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