PROJECT SUBMISSION

Task 1

For the subsequent half a year, in order to project demand for TechHub Electronics, I suggest to use
Exponential Smoothing method.

Justification for the Choice of Method:

Seasonality: The electronics industry experiences seasonal fluctuations due to reasons like
holiday shopping and product release cycles but these are well handled by the Holt-Winters
method.

Trend: Based on present information, smartphone, laptop and smartwatch sales have shown a
steady increase. The Holt-Winters method is able to adjust itself in relation to such changes
therefore providing dependable short-range predictions.

Sensitivity of Data: This technique allows for greater emphasis on more recent data points thus
it becomes highly responsive to variations in demand patterns. The importance of this factor lies
in the fact that demand figures change frequently hence accurate forecasting calls for quick
adaptation.

Assumption:

The assumption being made here is that trends experienced in seasonal as well as upward sales
previously will proceed into coming six months. Although this may not always be the case particularly
within an ever-changing environment such as electronics, the Holt-Winter’s provides a reliable
foundation for short term projection. Regular reviews must be done so forecasts can reflect new
information plus outside events e.g., product launch or marketing adjustments.

Task 2

ESF= α * Actual demand + (1−α) * Forecast demand

● The formula used for forecasting demand:

● The demand forecast for the next six months is shown in the table below:
 Smartphones Smartwatches
Month Laptops (Forecast)
(Forecast) (Forecast)

Jan 2044.92 1023.10 352.48

Feb 2121.44 1061.17 360.74

Mar 2175.01 1087.82 366.52

Apr 2212.51 1106.47 370.56

May 2238.76 1119.53 373.39

Jun 2257.13 1128.67 375.37

Task 3

● The formula used for calculating forecast errors:

Forecasting error = (Actual demand - forecast demand) * 100 / actual demand

● The forecast errors for the six months are shown in the table below
 Month Smartphones Laptops Smartwatches

Jan 444.92 268.10 93.48

Feb 472.44 196.17 68.74

Mar 606.01 210.82 116.52

Apr 462.51 183.47 156.56

May 318.76 119.53 173.39

Jun 217.13 28.67 179.37

Task 4

● The formula for calculating MAPE:

MAPE = Σ ((actual – forecast) / (actual))

● MAPE for all product categories for the six months:

Month Smartphones Laptops Smartwatches

Jan 27.81 35.51 36.09

Feb 28.65 22.68 23.54

Mar 38.62 24.04 46.61

Apr 26.43 19.88 73.16

May 16.60 11.95 86.70

Jun 10.64 2.61 91.52

● The formula for calculating Bias:

Total Variances (Forecast - Actual) / Total Actual

● Bias for all product categories for the six months:

Month Smartphones Laptops Smartwatches

 Jan 0.042 0.0486 0.0662

Feb 0.045 0.0355 0.0487

Mar 0.058 0.0382 0.0825

Apr 0.044 0.0332 0.1109

May 0.030 0.0217 0.1228

Jun 0.021 0.0052 0.1271

Task 5

Recommendation 1 + Justification:

Diversification of suppliers and risk mitigation (for smartphones)

● Justification: A critical measure is to have diverse component suppliers for smartphones to cope
with the high demand volatility and potential supply chain interruptions within the electronics
sector. Here, the strategy lowers the risks of depending on one source only that can lead to
production holdups and shortages during unforeseen events like natural calamities or
geopolitical disputes.
 ● Actions to take:

1. Identify vital components used in smartphone manufacturing and assess supplier

concentration for each.
2. From various suppliers located even in different geographical locations, secure key parts
so as to minimize regional disturbances.
3. Therefore, having backup plans like buffer stocks and an alternative sourcing option
allows you to deal quickly with any disruptions in your supply chain.

Recommendation 2 + Justification:

Introduce Advanced Inventory Management Techniques (for Laptops)

● Justification: The complex manufacturing processes of laptops contribute to longer lead times
thus it is difficult to react quickly to sudden demand spikes. Implementing advanced inventory
management techniques will be crucial in enhancing the response to demand fluctuations as
well as reducing lead times.

● Actions to Take:

1. Employ just-in-time (JIT) inventory management methods that ensure product availability
while minimizing carrying costs.

2. Use tools for sensing and shaping demand so as to predict and shape customer demand
better and, therefore, manage inventories more proactively.

3. The safety stock levels have been tuned by considering such factors as seasonality,
supplier reliability and transport lead time.

Recommendation 3 + Justification:

Improve Demand Collaboration with Retailers (for Smartwatches)

 Justification: In contrast to smartphones and laptops, smartwatches enjoy relatively

stable periods of demand throughout the year. Thus, for smartwatches’ supply chain
improvement purposes, it is necessary to put in place better cooperation channels
through establishing a good communication linkage with retailers so that production can
be aligned according to actual market needs.

 Actions to Take:
1. Establish vendor managed inventory (VMI) system or Collaborative Planning
Forecasting and Replenishment (CPFR) with major retailers in order for them to
share their demands forecasts along with their inventory data,

2. Keep checking sales information and working with retailers to adjust production
plans in accordance with dynamic demand patterns.

3. In order to improve forecast accuracy and minimize issues of overstocking or

understocking, it might be wise to offer some incentives to the retailers for
sharing timely and accurate data on demand.