Specialty Packaging Corporation,

Part A
Ali Azhar Dame - Ira
About Polystyrene

Polystyrene(PS) is a syntheticaromaticpolymermade from themonomerstyrene, a liquid

petrochemical. Polystyrene can be rigid or foamed. General purpose polystyrene is clear, hard
and brittle. It is a very inexpensive resin per unit weight. It is a rather poor barrier to oxygen
and water vapor and has a relatively low melting point.Polystyrene is one of the most widely
usedplastics, the scale of its production being several billion kilograms per year.Polystyrene
can be naturallytransparent, but can be colored with colorants. Uses include protective
packaging (such as packing peanuts and CD andDVDcases), containers (such as "clamshells"),
lids, bottles, trays, tumblers, and disposablecutlery.
As athermoplasticpolymer, polystyrene is in a solid (glassy) state at room temperature but
flows if heated above about 100 C, itsglass transition temperature. It becomes rigid again
when cooled. This temperature behavior is exploited forextrusion, and also
formoldingandvacuum forming, since it can be cast into molds with fine detail.
Problem Identification
Julie Williams wants to :
Select the appropriate forecasting method and estimate
the likely forecast error. Which should she choose?
Forecast quarterly demand for each of the two types of
containers for the years 2007 to 2009.
Improve supply chain performance, as SPC had been
unable to meet demand effective over the previous
several years.
Supporting Theory
Forecasting Classifield
Qualitatif
Primarily subjective and rely on human judgment.

Causal
The demand forecast is highly corelated with certain factors
in the environment

Simulations
Imitate the consumer choices that give rise to demand to
arrive at a forecast

Forecast Method Applicability

Time Series Moving average No trend or
seasonality
Use historical demand to make a forecast
Simple exponential No trend or
Multiplicate : level x trend x seasonal factors smoothing seasonality
Holts model Trend but no
Additive : level + trend + seasonal factors seasonality

Mixed : (level trend) x seasonal factors Winter s model Trend and

seasonality
Supporting Theory
Basic Approach to Demand Forecasting
Understand the objective
of forecasting

Integrate demand
planning and forecasting

Understand and identify

customer segment

Identify the major factors

that influence the
demand forecast

Determine the
appropriate forecasting
technique

Establish performance
and error measure for the
forecast
Supporting Theory
Bullwhip Effect
Analysis 1
Understand the objective
of forecasting

Over the several years, they had

been unable to meet demand

Integrate demand
planning and forecasting

Establish a collaborative forecast using

data from the SPC and Customer
Have two produts, black and clear plastic
Have quarterly historical demand plastic
container
Analysis 1

Understand
and identify
customer
segment

Identify the
major
factors that
influence
the demand
Summer Fall forecast
Analysis 1
Determine the
appropriate forecasting
technique

Increasing volume (000 lb) in

every quarter each years.
Historical demand of plastic
containers influence by seasonal
demand

Establish performance
and error measure for the
forecast

MSA (Mean Square Error)

MAPE (Mean Absolute Percentage Error)
Analysis 2
CMA TREND AFTER
ADJUSTMENT
DESEASONALI
BY THE
ZED SALES = TREND (Y =
Black plastic SEASONAL SEASONAL
Year Quarter Sumbu X INDEX Sales/Season 8,886.63 +
demand RATIO INDEX =
WEIGHT al Index 853.79x)
Trend x
(Sumbu Y)
Seasonal
Index

2002 I 1 2,250 0.5 0.25 8,926.81 9,740.42 2,455

II 2 1,737 1 0.19 9,325.34 10,594.21 1,973
III 3 2,412 1 12,982.25 0.19 0.19 12,821.17 11,448.00 2,154
IV 4 7,269 1 14,331.38 0.51 0.47 15,402.99 12,301.79 5,805

REGRESI LINIER Year Quarter

Black Plastic Clear Plastic
Demand Demand
Black Y = 8,886.63 + 853.79x I 6,759 5,929
Clear Y = 15,001.69 + 700.61x 2007
II 5,154 15,158
III 5,366 8,149
IV 13,864 4,190
Forecasting method I
II
7,620
5,790
6,488
16,555
2008
Time series III 6,009 8,883
CMA IV 15,476 4,559
I 8,481 7,048
Seasonal and trend
II 6,426 17,951
Ekstrapolasi regresi linier 2009
III 6,651 9,617
IV 17,087 4,928
 Analysis 3
Manufacturers Wholesalers
Stores orders Sales from
orders to its orders to
to wholesaler store
suppliers manufacturer

Orders

Orders
Orders
Orders

0 0 0 0
Time Time Time Time

Manuf- Whole Retail

Supplier
acturer -saler Store

Julie Williams used optimum forecast to meet

unpredictable demand influence by seasonal demand
(response supply chain objective)
Analysis 3
Coordination
mechanism for reducing
supply chain dynamic
instability by using
information sharing,
channel alingment and
operational efficiency
Recomendation
Lesson learned
Company should understand the role of forecasting for
both an enterprice and a supply chain.
Manage unpredictable demand with coordination
mechanism by using information sharing, channel
alingment and operational efficiency.
 Terima Kasih