# A-CAT Corporation Case Solution & Answer

## A-CAT Corporation Case Solution

Statistical tools and analysis

Three tools and techniques were used in this analysis for forecasting. The statistical process analysis is done by the simulation method, Exponential smoothing and by mean of the former data. The simulation method evaluates the random sales of refrigerators that refer to the potential of transformers requirements. The exponential smoothing develops a framework that concludes the forecasting by taking a smoothing factor of 50% in the next forecast.

The validity of the data is the calculation by determining the correlation between sales of refrigerators and requirement of transformers. The analysis shows the data is highly correlated with each other that enclose its validity. The simulation method is highly appropriate for forecasting random sales and the data also shows inappropriate falls and declines in demand for transformers that can also be analyzed by the randomly adapting theorem.

The reliability is evaluation by the calculation of the reliability factor. The reliability of the exponential smoothing is verified by this factor, while the result for forecasting from the simulation method was not verified. At the other hand, it is found the results from the mean of the formerly forecasting of the previous years are highly reliable.

Decision

Â The company should come up with the proper forecasting method as it is observed the demand and sales of the refrigerators is high in 2nd and 3rd quarter of the year. The demand for the refrigerators highly seeks the appropriate number of transformers should present in the inventory. The sales of the refrigerators are increasing and decreasing with a inappropriate rate that make it difficult for the management to know the accurate requirement of the transformers. The forecasting of the transformers should be managed by the recommended exponential smoothing. The company should maintain the inventory of transformers higher than its demand, in case if the demand increases, the company would have sufficient stock available. The exponential smoothing factor that is used is 50%, the company can increase the factor that in order to determine the higher sales of refrigerators.

Apeendix

 Quarter Transformer Requirements by simulation Transformer requirements by exponential smoothing 2011 1 2776 2688 Â 2 2675 2504 Â 3 2455 2356 Â 4 2675 2405 2012 1 2776 2795 Â 2 2399 2798 Â 3 2675 2571 Â 4 2675 2623 2013 1 2776 3050 Â 2 2675 2984 Â 3 2675 2899 Â 4 2675 2886 2014 1 2399 3330 Â 2 2776 3289 Â 3 2675 3198 Â 4 2675 2987

 Â Â Â Â Â Â Â  2,011 Â Â Â Â Â Â Â  2,012 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  2,013 Â Â Â Â Â Â Â Â Â Â  2,014 Â Â Â Â Â Â Â  1,000 Â Â Â Â Â Â Â  1,027 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,055 Â Â Â Â Â Â Â Â Â Â  1,084 Â Â Â Â Â Â Â  1,030 Â Â Â Â Â Â Â  1,057 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,085 Â Â Â Â Â Â Â Â Â Â  1,113 Â Â Â Â Â Â Â  1,050 Â Â Â Â Â Â Â  1,093 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,138 Â Â Â Â Â Â Â Â Â Â  1,185 Â Â Â Â Â Â Â  1,140 Â Â Â Â Â Â Â  1,199 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,261 Â Â Â Â Â Â Â Â Â Â  1,326 Â Â Â Â Â Â Â  1,153 Â Â Â Â Â Â Â  1,230 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,313 Â Â Â Â Â Â Â Â Â Â  1,401 Â Â Â Â Â Â Â  1,158 Â Â Â Â Â Â Â  1,243 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,335 Â Â Â Â Â Â Â Â Â Â  1,434 Â Â Â Â Â Â Â  1,176 Â Â Â Â Â Â Â  1,245 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,319 Â Â Â Â Â Â Â Â Â Â  1,397 Â Â Â Â Â Â Â Â Â Â Â  909 Â Â Â Â Â Â Â  1,008 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,119 Â Â Â Â Â Â Â Â Â Â  1,241 Â Â Â Â Â Â Â Â Â Â Â  892 Â Â Â Â Â Â Â Â Â Â Â  961 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,034 Â Â Â Â Â Â Â Â Â Â  1,113 Â Â Â Â Â Â Â Â Â Â Â  909 Â Â Â Â Â Â Â  1,029 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,166 Â Â Â Â Â Â Â Â Â Â  1,320 Â Â Â Â Â Â Â Â Â Â Â  919 Â Â Â Â Â Â Â  1,020 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,131 Â Â Â Â Â Â Â Â Â Â  1,255 Â Â Â Â Â Â Â  1,006 Â Â Â Â Â Â Â  1,070 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  1,138 Â Â Â Â Â Â Â Â Â Â  1,210

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