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    Application of Operations Management Techniques in HP Bangladesh

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    Vurdalack666
    The document discusses forecasting methods used to predict future monthly laptop sales for AsusTek Computer Inc. It examines simple moving average, single exponential smoothing, and regression analysis on 12 months of past sales data. Mean absolute deviation is used to measure forecast accuracy across methods, with the goal of finding the most appropriate forecasting model. AsusTek produces laptops and other digital products, and has global operations and over 10,000 employees.

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    Application of Operations Management Techniques in HP Bangladesh

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    Vurdalack666
    106 views13 pages
    The document discusses forecasting methods used to predict future monthly laptop sales for AsusTek Computer Inc. It examines simple moving average, single exponential smoothing, and regression analysis on 12 months of past sales data. Mean absolute deviation is used to measure forecast accuracy across methods, with the goal of finding the most appropriate forecasting model. AsusTek produces laptops and other digital products, and has global operations and over 10,000 employees.

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    This is the overview of Operations Management techniques applied in ASUS Bangladesh

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    Application of Operations Management techniques in HP Bangladesh

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    The document discusses forecasting methods used to predict future monthly laptop sales for AsusTek Computer Inc. It examines simple moving average, single exponential smoothing, and regression analysis on 12 months of past sales data. Mean absolute deviation is used to measure forecast accuracy across methods, with the goal of finding the most appropriate forecasting model. AsusTek produces laptops and other digital products, and has global operations and over 10,000 employees.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    106 views13 pages

    Application of Operations Management Techniques in HP Bangladesh

    Uploaded by

    Vurdalack666
    The document discusses forecasting methods used to predict future monthly laptop sales for AsusTek Computer Inc. It examines simple moving average, single exponential smoothing, and regression analysis on 12 months of past sales data. Mean absolute deviation is used to measure forecast accuracy across methods, with the goal of finding the most appropriate forecasting model. AsusTek produces laptops and other digital products, and has global operations and over 10,000 employees.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 13
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    The key takeaways are that the report examines different forecasting methods to predict future sales for AsusTek Computer Inc. in Bangladesh. It analyzes time series forecasting methods like simple moving average, exponential smoothing, and regression analysis.

    The main objectives of the report are to develop an accurate forecasting technique to predict future monthly laptop sales and to find an appropriate forecasting model for production planning. It also partially fulfills an operations management course requirement.

    The forecasting methods examined are simple moving average, single exponential smoothing using different alpha values, and regression analysis.

    1.

    Introduction of Operations Management


    Operations management is an area of management concerned with overseeing, designing, and controlling the process of production and redesigning business operations in the production of goods or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed, and effective in terms of meeting customer requirements. It is concerned with managing the process that converts inputs in the forms of materials, labor, and energy into outputs in the form of goods and or services.

    2. Role of Operations Management in organizations


    Operations management provides versatile activities of a particular organization. Operations Management Implies of an efficient forecasting techniques to predict the future demand of the produced final products & as well as taking the corrective decisions regarding the production planning and inventory management. It could be denoted as one of the major tasks of the operation management team of that firm. Different forecasting methods are being used in every aspect of todays modern business.

    3. Forecasting Method
    Through intensive study, it has been found that, forecasting study works best while recognized models are used together. There are various types of forecasting methods such as: Qualitative study, Time series analysis, Causal method etc. For this particular assignment, we have used some methods of Time series analysis like Simple Moving Average, Single Exponential Smoothing, and Regression Analysis etc. Various models, mostly quantitative time series models have been used to determine the forecasted future monthly sales quantity of Laptops for the month of November 2013. For the simplicity of the work, actual monthly sales data have been taken from the November month of the year 2012 till to the second last month of the year 2013 (12Months). There are various methods of measuring errors like MAD (Mean absolute deviation), TS (Tracking signal), MSE (Mean Squared Error), MSD (Mean Squared Deviation) and MAPE (Mean Absolute Percentage) etc. But we have used only MAD (Mean Absolute Deviation) to measure errors. The more methods we will use to find the forecasting quantity of sold Asus Laptops the more accurate our forecast will be. Although in our assignment we have used limited methods to forecast, but still, it is our belief that the accuracy level of this particular assignment is satisfactory.

    AsusTek Computer Inc.

    AsusTek Computer Inc. pursues technological and aesthetic perfection through continuous innovation. We place ourselves in our customers shoes to develop a deep understanding of, and genuine empathy for, their needsenabling us to create user experiences that transcend the norm. AsusTek Computer Inc. places great importance on employee virtues. Five characteristics have been identified as key to the smooth development of processes and relationships. The five ASUS virtues are: Humility, Integrity, Diligence, Agility and Courage.

    AsusTek Computer Inc. , a technology-oriented company with a global staff of more than ten thousand and blessed with one of the world's top R&D teams, is renowned for highquality products and cutting-edge innovation. As a leading company in the new digital era, ASUS offers a complete product portfolio to compete in the new millennium.

    1.1 Origin of the report


    This production research report study is all about an appropriate forecasting model for a specific company AsusTek Computer Inc. Asia Pacific- Bangladesh, in predicting future quantity for production or order. The origin of the data used in the method was taken from forecast and the actual sales, for the period November 2012 to November 2013. Finally the forecast is calculated for the period of December 2013.

    1.2 Objective of the report


    The purposes of this report are: 1. To develop a suitable and accurate forecasting technique to predict future monthly Laptops sales quantity for the month of December, 2013 and to find out an appropriate forecasting model to use in predicting future quantity for production or order of the year 2013 (December) of Asus. 2. To partially fulfill the requirements of the course named Operation Management.

    2.0 Products of Asus


    Asus offers a wide range of products and services. The products line: Computers & Accessories Laptop Desktop Tablets Customize Desktop ( Commercial)

    2.1 History of AsusTek Computer Inc.


    AsusTek Computer Inc. was founded in Taipei in 1989 by T.H. Tung, Ted Hsu, Wayne Hsieh and M.T. Liao, all four having previously worked at Acer as computer engineers. At this time, Taiwan had yet to establish a leading position in the computer-hardware business. Intel Corporation would supply any new processors to more established companies like IBM first, and Taiwanese companies would have to wait for approximately six months after IBM received their engineering prototypes. By 2009, AsusTek Computer Inc. was receiving Intel engineering sample ahead of its competitor.

    2.5 Distribution Process of AsusTek Computer Inc.


    Asus is an international brand worldwide. They have their unique distribution channel for Bangladesh. They market their product through a domestic renowned company. Asus import their product from China and the product come to the Chittagong port and then it send to the warehouse, from where the product delivered to the different showroom located in the country. Lastly the showroom or the direct sales force can sell to the end user.

    Head Office (Dhaka)


    AsusTek Computer Inc. 19/2, West Panthapath, Salim Center (3rd~5th & 7th floor), Dhanmondi, Dhaka-1205. Tel.: (88-02) 8123273~5, 8123283~4, Fax: (88-02) 9145687, 9120045 Mailto: [email protected]

    Branch Office (Dhaka)


    AsusTek Computer Inc. BCS Computer City, IDB Bhaban (1st floor), Shop no. SR-123/6, Agargaon, Dhaka. Phone: (88-02) 8123281, 9133776.

    ASUS NOTEBOOK SERVICE CENTER AsusTek Computer Inc. 19/2, West Panthapath, Salim Center (7th floor), Dhanmondi, Dhaka-1205. Phone: (88-02) 8123273~5, Fax: (88-02) 9145687, 9120045 Hotline: 01977476485 / 01973257935 / 01713257935 Mailto: [email protected]

    Distributor
    Global Brand Pvt. Ltd. 19/2, West Panthapath (3rd~5th & 7th floor) Dhanmondi, Dhaka-1205, Bangladesh E-mail: [email protected], [email protected], [email protected]

    3.0 DATA DESCRIPTION


    A time series is a time ordered sequence of observations of a variable. Time series analysis uses only the time series history of the variable being forecasted in order to develop a model for predicting future values. Analysis of time series that are requires the analyst to identify the underlyingbehavior of the series. This can often be accomplishing by merely plottingthe data and visually examining the plot. ASUS is one of the worlds famous Companies in producing and supplying digital goods like laptops, pc technology, server, tablet and other products. The main operation of ASUS is Transforming ASUS into a top-level innovative and diversified electric/electronic manufacturer with strong competitive power. ASUS aims to become an even stronger global contender by unleashing our powers of imagination to anticipate, ahead of others, and capitalize on the coming trends in the world business environment. Here we use monthly sold quantity or number of pieces sold of Laptops in ASUS from November 2012 to November 2013 which generates a sample size of 13 observations. As we said earlier, the data are monthly sold quantity of laptops of ASUS from November 2013 to November 2013. Thus a total of 13 observations are used in this analysis. 4.0 Process, Perceptionand Data Analysis: The purpose of this report is to compare the results of several forecasting methods to determine which model appears most appropriate for the given time series. The use of historical data contains hidden information which may prove useful in our attempt to forecast future number of Laptops sold quantity of per month. Our implicit assumption is that the underlying variables which influence Laptops sold quantity in the past will continue to influence in future. The computation method of different forecasting model is done with the help Microsoft Excel. In this report we examine the forecasting accuracy of several models, including Moving Average, Regression Analysis, Exponential Smoothing (single). We have also used MAD as measures of accuracy.

    4.1 SIMPLE MOVING AVERAGE When demand of a product is neither growing, nor declining rapidly, and it does not have any seasonal effect, then this method is applicable. Formula is: Ft = (At-1 + At-2 +At-3 +----------------------------------+ At-n)/n Where Ft = Forecast for period t. N= No. of periods to be averaged. At-1 = Actual occurrences in the past period. At-2 = Actual occurrences in the two period ago. At-n= Actual occurrences up to n period ago.

    S/N 1 2 3 4 5 6 7 8 9 10 11 12 13

    Month January February March April May June July August September October November December January

    Year 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2013

    Period 1 2 3 4 5 6 7 8 9 10 11 12 13

    Actual sell (pcs) 245 213 158 170 194 169 155 254 301 271 224 253

    3 Months MA Forecast (pcs)

    206 180 174 178 173 193 237 275 265

    F13 Jan 2013= 253+224+271 = 250 pcs (When 3 Month MA Forecast) 3

    350 300 250 200 150 100 50 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

    sell Period

    Chart 1: Graphical representation of Simple Moving Average 4.2 SINGLE EXPONENTIAL SMOOTHING Single exponential smoothing calculates data by computing exponentially weighted averages and provides short-term forecasts. This procedure works best for data without a trend or seasonal component. Each new forecast is based on the previous forecast plus a percentage of the difference between that forecast and the actual value of the series at that point. That is: Next forecast = Previous forecast + (Actual- Previous forecast) Where (Actual- Previous forecast) represents the forecast error and is a percentage of that Error, then more concisely, Ft = Ft-1 + (At-1- Ft-1) or Ft = At-1+ (1-) Ft-1

    Where, Ft = Forecast for the next period (week, month, quarter, year, etc.), Ft-1 = Forecast for the previous period, At-1 = Actual demand/sales for the previous period A = Smoothing constant (0-1) Let, Smoothing Constant: Alpha () Smoothing Constant: Alpha () Smoothing Constant: Alpha ()

    =0.6 = 0.4 =0.35 = 257.8 or 258 pcs =260.2 or 261 pcs = 260.8 or 261 pcs

    Ft = At-1+ (1-) Ft-1 = 0.6 (253) + (1-0.6) 265 = 0.4 (253) + (1-0.4) 265 = 0.35(253) + (1-0.35) 265

    4.3 REGRESSION ANALYSIS


    Regression analysis is useful when the trend is increasing or decreasing. The forecast followsthe basic regression formula which is Y= a + bx, where Y is the forecast for the month foundby the value of a, b and period x. S/N Month Year Period (X) 1 2 3 4 5 6 7 8 9 10 11 12 13 X=91 Actual sell (Y) 245 213 158 170 194 169 155 254 301 271 224 253 Y=2547 XY X2

    1 2 3 4 5 6 7 8 9 10 11 12 13 14

    January February March April May June July August September October November December January

    2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2013

    1 426 4 474 9 680 16 970 25 1014 36 1085 49 2032 64 2709 81 2710 100 2464 121 3036 144 169 XY=17843 X2 =819
    245

    Forecast for the next month would be: -

    b=

    17843-12(7.5)212.25 819- 12(7.5) 2

    = - 8.75 or 9 (approximately)

    = 212.25- (-9) (7.5)

    = 144.75

    So, Forecast for the next period, Y13 Jan 2013 = a + b (13) {As Y= a + bx} Y13 Jan2011 = 144.75 + (9)13 = 261.75 or 262 pcs

    Sell
    350 300 250 200 150 100 50 0 Sell

    Graph 2: Regression Analysis System

    5.0 Measuring the Forecasting Error by - Mean Absolute Deviation (MAD)


    There may be difference between actual sales and forecast amount. It is necessary not only to forecast, but also to measure error for future adjustment. Forecast Error is measured using Mean Absolute Deviation (MAD) MAD= I At-Ft I / N Where n= no. of periods.

    At = Actual sales in period t. Ft = Forecasted sales in period t

    S/N

    Month

    Year

    Period

    Actual sell 245 213 158 170 194 169 155 254 301 271 224 253

    3 Months I MA I Forecast

    At-Ft

    1 2 3 4 5 6 7 8 9 10 11 12 13

    January February March April May June July August September October November December January

    2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011

    1 2 3 4 5 6 7 8 9 10 11 12 13

    206 180 174 178 172 193 237 275 265

    36 14 5 23 82 108 34 51 12

    When Moving Average Length is 3 So, MAD = 365/9 = 40.55 or 41 Pcs

    350 300 250 200 150 100 50 0 1 2 3 4 5 6 7 8 9 Period 11 12 13 Period Sell 3 months Forecast Forecast Error

    10

    Graph 3:Mean Absolute Deviation (MAD)

    6.0 RESULTS AND DISCUSSION


    The observed the results are combined and shown as follows: Serial Forecasting Results no methods 01 Single F13 January 2011= 250 moving pcs (When 3 Month MA average
    Forecast)

    Error by MAD

    02

    Single exponential smoothing

    258 pcs (When =


    0.6)

    261 pcs(When =
    0.4)

    261 pcs(When =
    0.35)

    03

    Regression analysis

    262 pcs

    The purpose of forecasting is to reduce the risk in decision-making. For our chosen company ASUS, appropriate forecasting technique examining help to identify the peak orderproducing-delivering-customer service season, and help managers plan accordingly to handle the peak load very effectively and efficiently. Forecasting also helps in scheduling staff and resources and in financial planning. To forecast future quantity for producing or quantity for order to sell of any home products or appliances; it must have a forecasting method that is reliable and accurate. It must also minimize costs, of course, but lowest cost is not an absolute priority, given the serious financial ramifications of forecast error. The forecast should be cost-effective; the benefits should overweight the costs. Therefore it makes a great deal of sense to experiment with various forecasting models to determine which model generates the most reliable results. To that end this report examines the forecasting accuracy of several models, including , Simple Moving Average, Exponential Smoothing, Regression Analysis, By examining these models using MAD, as measures of accuracy, our evaluation shows that Regression analysis is giving moderate result(rationally acceptable ) in terms of the original data and resulting less error comparatively to other forecasting techniques .

    7.0 Bibliography

    Sources used in this report have followed theories and information from the following books and corporate office: 1. Chase; Aquilano and Jacobs (2000), Production and Operations Management: Manufacturing and services (8th ed.), Irwin- McGraw Hill. 2. ASUS Bangladesh (2013), ASUS Products. Retrieved November 26, 2013, from http://www.asus.com/bd/.

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