Demand Forecasting and Capacity Strategy There are three types of capacity that are inter-related, they are; Design or Nameplate Capacity Effective Capacity Actual Output Briefly describe each type of capacity. List three ways, with three examples each, how capacity might be Increased in the short to medium term Decreased in the short to medium term Discuss FIVE factors that may determine effective capacity Facilities Product and Service Process Human Policy Operational Supply Chain External Jean and Dinah had been in business for two years producing umbrellas to be sold to the cruise ship passengers when they docked. They found constantly out of umbrellas and had to do rush productions which has resulted in the increase of their production cost. Jean has a nephew who is enrolled in the UWIOC and he advised her to prepare forecasted quantities using the sales that they made over the past months. The data below represents sales for the last 9 months. In order to assist jean and Dinah you are asked to; Plot the data on a graph showing the trend line Determine the equation of the trend line Predict sales for month 10 and month 11. Months Sales 1 44 2 52 3 50 4 54 5 55 6 55 7 60 8 56 9 62 The manager of a large cement production factory in Road Town, Tortola has to choose between two alternative forecasting techniques. His production staff used both techniques in order to prepare forecasts for a six-month period. Using MAD as a criterion, which technique has the better performance record? FORECAST MONTH DEMAND TECHNIQUE 1 TECHNIQUE 2 1 492 488 495 2 470 484 482 3 485 480 478 4 493 490 488 5 498 497 492 6 492 493 493 An electrical contractor’s records during the last five weeks indicate the number of job requests Week 1 2 3 4 5 Requests 20 22 18 21 22 Predict the number of requests for week 6 using each of the following methods; The naïve approach A four figure moving average Exponential smoothing with α = .30. Use 20 for week 2 forecast INSTRUCTIONS