Operation Management
Research Project | New Zealand Natural Ice Cream | |
Operations Management
Operations Management
Executive summary
The paper concentrates on studying operation management of ‘New Zealand Natural Ice Cream’in terms of its demand forecasting and inventory management strategies. The purpose is to improve the efficiency of the operation network. For doing so, qualitative data are researched and analyzed to reflect the current operation of the shop. Then, various demand forecasting, based on quantitative data, would be conducted to find out the optimal solutions for improving operational efficiency.
Currently, the shop faces severe competition and certain inventory problems like seasonal stock out and excess inventory. As a result, accurate demand forecasting and establishing inventory model seem the priorities for the shop. After analyzing acquired data, it is found that the 3-month weighted moving average is the most suitable demand forecasting method for the shop, which helps eliminating inventory problems. Meanwhile, EOQ analysis also provides some significant suggestions for counter the current inventory problems. Firstly, it is suggested for the shop to order more than 2000 units per order for taking the advantage of the 7% discount price and in turn saving costs. Further, inventory is recommended to be automatically replenished when stock level decreases to 22 packages in order to reducing stock out. In addition, it seems necessary to regular communicate with major suppliers.
Table of Contents Executive summary 1 List of tables 3 Introduction 4 Research Objective 4 Background 4 Discussion on chosen topic 5 Discussion on current situation 7 Data analysis 8 Forecasting sales of Ice Cream Shop 8 Process of 3-Month moving average 9 3- Month Weighted moving average (1:2:3) 10 Exponential Smoothing (α= 0.1, α= 0.5) 11 Trend projections 13 Comparison of MAD, MSE and MAPE 15 EOQ Model 16 Recommendations 18
Operations Management
Operations Management
Executive summary
The paper concentrates on studying operation management of ‘New Zealand Natural Ice Cream’in terms of its demand forecasting and inventory management strategies. The purpose is to improve the efficiency of the operation network. For doing so, qualitative data are researched and analyzed to reflect the current operation of the shop. Then, various demand forecasting, based on quantitative data, would be conducted to find out the optimal solutions for improving operational efficiency.
Currently, the shop faces severe competition and certain inventory problems like seasonal stock out and excess inventory. As a result, accurate demand forecasting and establishing inventory model seem the priorities for the shop. After analyzing acquired data, it is found that the 3-month weighted moving average is the most suitable demand forecasting method for the shop, which helps eliminating inventory problems. Meanwhile, EOQ analysis also provides some significant suggestions for counter the current inventory problems. Firstly, it is suggested for the shop to order more than 2000 units per order for taking the advantage of the 7% discount price and in turn saving costs. Further, inventory is recommended to be automatically replenished when stock level decreases to 22 packages in order to reducing stock out. In addition, it seems necessary to regular communicate with major suppliers.
Table of Contents Executive summary 1 List of tables 3 Introduction 4 Research Objective 4 Background 4 Discussion on chosen topic 5 Discussion on current situation 7 Data analysis 8 Forecasting sales of Ice Cream Shop 8 Process of 3-Month moving average 9 3- Month Weighted moving average (1:2:3) 10 Exponential Smoothing (α= 0.1, α= 0.5) 11 Trend projections 13 Comparison of MAD, MSE and MAPE 15 EOQ Model 16 Recommendations 18