A-Cat Corp Forecasting Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

A-Cat Corp Forecasting Case Study Help

Best Suited Forecasting technique with Rationale

In consideration of developing more accurate model for requirement of forecasting transformer, the company is recommended to use the exponential smoothing forecasting technique due to the fact that it is easy to apply and produces accurate forecast as it is a time series forecasting that could be extended in order to support the data with seasonal component. Also, this kind of forecasting technique would allow the management of the company to efficiently plan the inventory level on the more relevant basis of the most recent data. It also reduces the requirements related to the data storage because it takes into two pieces of data i.e. actual value of the last period and the predicted value of the similar period. Using a low smoothing constant means that the forecast would be less sensitive, thus representing low spikes in the demand of transformers that the forecast would have. The company could use the small constant if the product would have high level of noise. On the other hand, if the product would have low level of noise, the company could use the higher constant. The effective utilization and application of this technique would allow the company to make accurate future forecast for the product.(John C. Chambers, 2015)

Conclusion

A-CAT Corporation is leading mid-sized manufacturing company that specializes in the production of domestic electrical appliances being catered to price sensitive rural population in India.The main product of the company is voltage regulator that is sold and branded under the tag of VR-500, which acts as a protective device for television and refrigerators against the frequent power failure and voltage fluctuation.This phenomenon is common in the same region.In the earlier time period, the financial performance of the company was negatively impacted by an inefficient technique being practiced for an assessment of the transformer inventory. The use of this inefficient method in forecasting the inventory had led to the underestimation and overestimation of inventory.The company is recommended to use an exponential smoothing forecasting technique due to the fact that it is easy to apply and produce an accurate forecast as it is a time series forecasting that could be extended in order to support the data with seasonal component......................

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