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IE 442
Forecasting
 With  choosing the forecasting or enter 12
in selection option.
 The solution algorithm
   Exponential smoothing
• Starting with the latest observation and going
backward in time.
   The basic of exponential smoothing:
• New estimation = old estimation + a fraction of the
error
Chose if data file exists
Chose for enter a new
data set (in this case)
Forecasting Module
The screen ofindependent
The number of
The largest number of
series you wish to
observations to be entered
investigate
for any one of them
A sample problem
A large paint manufacturer sells
pigmented acrylics for the automotive
aftermarket under various labels in two
basic forms:
   Factory packs of ready-to-use colors.
   Mixing colors
 There are several thousand stock keeping
units (s.k.u.’s), each with its own pattern of
demand.
   The company has decided to make a preliminary
study of the following four representative
products or product group:
   An individual s.k.u. of the mixing colors sold under the
Apex label.
   An individual s.k.u. of the factory packs marketed
under the Bestrim label.
   The aggregated sales of all mixing colors sold as
Colormatch paint.
and mixing colors) sold under the Dabiton label.
   For each , quarterly sales data are available
over a five year period.
Length of seasonal pattern entirely:
Specify whether the series is(season LNG):
of observation to to entered:
FormNumber of periodsbe used for Mode Validation
Positive Number (enter P)
This entry specifies (MODEL VAL): series to repeat
the )
Integer ( type Ilength of time
Negativepattern model validation must leave
Number
the value you(type R)for(enter N) for monthly.)
any seasonalchoose (Default 12
Real
at of both (enter U seasonal +4 observation.
Mixtureleast length of thefor unrestricted)
Length of plan horizon (PLAN HORIZ):
Default 1 for of smoothing
Initial values one period. constants: (LEVEL
ALPHA, TRND ALPHA, SEAS ALPHA)
0.2 is defaulted value..
Choice of model (MODLE):
Search for Improved smoothing Constants
L for Level model
(SEARCH?) trend model
T for the
Grid size for smoothing constant search (STEP SIZE)
S for the seasonal model
F for full or trend-seasonal model.
Name of the periods in this case use the QRT #
and year
Data Entry for the sample problem

Press F7 when the
data entry completed
Bestrim Indiv   Colormatch All
Apex Indiv Mix                                    Dabition All
Pack              Mix
1st Qrtr 1979        1519             3071            55880           22560
2nd Qrtr 1979        2307             3024            50832           25498
3rd Qrtr 1979        2434             2765            72392           19956
4th Qrrtr 1979       1352             2775            89886           13142
1st Qrtr 1980        2084             2614            77421           19940
2nd Qrtr 1980        2329             2765           107846           20638
3rd Qrtr 1980        3330             3348            90628           24534
4th Qrtr 1980        2260             2931            96574           18392
1st Qrtr 1981         3811            3136           134883           21996
2nd Qrtr 1981        4926             2692           163524           23080
3rd Qrtr 1981        4505             3062           160059           24660
4th Qrtr 1981        1972             2794           116367           16049
1st Qrtr 1982        3874             2836           133721           22526
2nd Qrtr 1982        4775             3168           182356           24044
3rd Qrtr 1982        4981             2539           169950           24470
4th Qrtr 1982        3252             3092           187333           15598
1st Qrtr 1983        3965             3220           160017           18550
2nd Qrtr 1983        6166             3414           160910           24191
3rd Qrtr 1983        5845             3561           170692           25076
4th Qrtr 1983        4184             2733           200664           19225
Select 4th item which is
execute the module
with the current data
set
1. summary report for time series
 You  must first choose which of the time
series you wish to consider at this time(by
spacebar and arrow keys)
 Press F7 when it is done.
Error statistics
Performance measures for the
selected models
Final model components
2. Detailed Report for selected time
series
Initial condition for series 1
Model fitting statistics for series 1
Model validation statistics for series 1
Model plot for series 1
Model fitting/validation error
statistics for series 1
Extended Forecasts for Periods
Beyond QRT 4 1983 for Series 1
3. Analysis of a Time Series
   This final alternative on the Forecasting Options
menu is designed to let you experiment with any
one time series, easily and convenient.
Selection of Models to be Fitted
Set the smoothing
Searching for smoothing constants

 Theother steps is as the same as detailed
report
Production Scheduling
 Chose 13th option from Main Menu or type
13 in select option.
Production Scheduling Input

If file exists chose 1
otherwise chose 2
Planning
unit of capacity to produce one product unit
This is the number of periods in
We have entered company (N).
yes (Y). Else no       the planning horizon for the
name for the title products to
This is number of                scheduling problem
be schedule

This is the number of methods
There is three shortage policy:   of production available to us to
Backorder (B)                      meet demand.
Lost sale (L)
Allow both (N)
A Sample Problem
Charlesville Furniture Company
 The
(CFC) manufacture two kind of bar stools :
   The standard model
   de Luxe model
 The de luxe model has the added
attractive of a back rest and attractive
leather upholstery on the seat and the
back. Otherwise the product are identical.
   The assemblers are paid 8\$ and 12\$ per unit for standard
model, 12 and 18 For de luxe model in regular and
overtime.
   1 hour need for assemble one unit of standard model and
1.2 hour for de luxe model
   The assembly section currently has 5 workers available to
work 40 hours per week each one in regular time and up to
10 hours overtime.
   41 units of standard model and 23 units of de luxe model
   These units cost 38\$ and 55\$ in direct material and labor
expected and sell 53\$ and 80\$ per unit.
   39% inventory carrying charge per unit per year.
   Shortage policy is Lost Sale
   50 units of standard model and 25 units of de luxe must be
remain at the end of each week.
Forcast demand for next four
weeks
Standard    De luxe
Week
demand      demand

1          122         103

2          108         93

3          106         89

4          120         97
Data entry

If all of the basic information
entered correctly select Y
and then enter
Data entry view

Product Naming column:              Inventory cost:
Backorder cost
the first Demand in each period
enter Standard asProduction cost column:
product
If capacity/unit is N then have to entered the
capacity required to produce one unit of this
product by the method the column represents
Data entry for example
Inventory level at the end of
each period
Capacity Capacity available in the
available in the
overtime( Change the
regular time( Change the Method 2
to overtime)
Method 1 to regular)
Execution of the module
Production Scheduling
Cost Report by product
Cost report by summary
Product Report
Capacity Utilization Report
:Detailed
Capacity Utilization Report:
Summary
Customer Service Report
The end
Reference : Storm Software inc.
guide, 1989

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