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LEAD TIME & INVENTORY REDUCTION IN APPAREL SUPPLY CHAIN

Team Synergy
Abhishek Kumar Mangala M Rashmi Rao Jisna P Gopi

ABOUT THE COMPANY


Vision: To be a global benchmark for apparel industry in manufacturing and innovation providing competitive advantage to stake holders

Aditya Birla Group

Manufacturing arm of Madura Garments having brands like Louis Philippe , Van Heusen , Allen Solly and Peter England It comprises of 4 factories located in Bangalore , with a total employee strength close to 3000. The product range offered is mens and womens formal Shirts , Trousers and Suits with annual volumes of 43.6 Lakh garments.

AB Nuvo

Madura Garments

Madura Clothing

APPAREL SUPPLY CHAIN

Note:-To understand the apparel supply chain in brief which will help to understand the project better

NEED FOR PROJECT


No well defined and scientific replenishment model and stocking policy Stagnating sales growth year-on-year basis High finished goods inventory Increase in discounted sales year on year leading to profit erosion

LP Core FG Sales : FY08-10


600 500 400 300 200 100 0 8000 6000 4000 2000 0
Qty (in pcs) Qty (in pcs)

LP Core FG Inventory : FY08-10

APR 2008 MAY 2008 JUN 2008 JUL 2008 AUG 2008 SEP 2008 OCT 2008 NOV 2008 DEC 2008 JAN 2009 FEB 2009 MAR 2009 APR 2009 MAY 2009 JUN 2009 JUL 2009 AUG 2009 SEP 2009 OCT 2009 NOV 2009 DEC 2009 JAN 2010 FEB 2010 MAR 2010

APR 2008 MAY 2008 JUN 2008 JUL 2008 AUG 2008 SEP 2008 OCT 2008 NOV 2008 DEC 2008 JAN 2009 FEB 2009 MAR 2009 APR 2009 MAY 2009 JUN 2009 JUL 2009 AUG 2009 SEP 2009 OCT 2009 NOV 2009 DEC 2009 JAN 2010 FEB 2010 MAR 2010

FG inventory in the range of 5000pcs while Retail sales in 400pcs per month, hence carrying 10 months more inventory Due to such high FG inventory level, cash flow for business is blocked and discounted sales increasing to improve it

PROJECT CHARTER
Business Case : Total Lead time of Apparel supply chain was 130 days and there has been no replenishment leading to high outof-stock rate. The inventory level was very high carrying 9 months inventory. This threw up tremendous potential for improving the lead time and inventory reduction Scope: Fabric Retail Sales procurement to

Relation with business case , approach , scope , CTQs and benefits were finalized in the charter

SIPOC

Core

Fabric procurement from mill

Fabric storage at factory

Garment mfg at factory

FG storage at WH

Retail store replenish

Retail sales

CORE REPLENISHMENT SYSTEM


Fabric Mills

Factory

CRS ( Pull Strategy)

Warehouse

Retail Store

Consumer

Core products would be managed using continuous replenishment at FG as well as fabric stages

CORE REPLENISHMENT SYSTEM


Customer Fulfill Order Warehouse Garments Factory Fabric Status

Sends the order

Orders are Aggregated


WO yes

Garment Production
Fabric

Order Details

PO Preparation
PO Purchase

FG Stocks, WIP Levels

WO is generated

Fabric Avb.
no

Supplies Fabric
Supplier

Pending Order File

Fabric Stocks In-Transit, Fabric RoP Levels

Core products would be managed using continuous replenishment at FG as well as fabric stages

CTQ TREE DIAGRAM

Fabric

LEAD TIME (DAYS)

Reduction of Lead time and inventory in Apparel Supply chain for Core Replenishment System

MANUFACTURING LEAD TIME

Garment Manufacturing

RECUTTING% REWORK%

Finished Goods

INVENTORY (DAYS)

Retail

RETAIL SALES (PCS)

CTQ TABLE
Critical To Quality Characteristics (CTQ)
1. FABRIC PROCUREMENT LEAD TIME (DAYS)

Operational Definition Measure


FABRIC LEAD TIME FROM PO CREATION TO DELIVERY AT FACORY STORES TIME FROM WO CREATION TO DELIERY AT FACTORY WAREHOUSE
FINISHED GOODS INVENTORY IN DAYS RETAIL SALES IN PIECES PANELS RECUTTING BATCH RECUTTING

Current Status 105 Days

CTQ Specification <15 Days

Defect Definition > 15 Days

KANO Status
MUST BE

2. MANUFACTURING LEAD TIME (DAYS)

18 Days

<12 Days

> 12 Days

MUST BE

3. FINISHED GOODS INVENTORY IN WH (DAYS) 4. RETAIL SALES (PCS) 5. RECUTTING (%)

271Days 400 Pcs 4% 3% 7.83% 1.73%

< 60 Days >500 Pcs <3% <1% < 7% <5%

> 60 Days < 500 PCS >3% >1% >7% >5%

MUST BE MUST BE LOWER THE BETTER

6. REWORK (%)

END OF LINE FQC

LOWER THE BETTER

The project objective (Y) is addressed by focusing on the Must Be CTQs (ys) identified as shown above

MILESTONE
GANTT CHART
Jun10 DEFINE Project Charter SIPOC CTQ Tree Diagram MEASURE As-is CTQ Status APPROACH/ ANALYSIS Cause & Effect Diagram FMEA DEPLOYMENT/ IMPROVE NVA Identification & stratification Setting up section wise WIP Norms Single piece clearance on daily basis Developing system to monitor online ASSESSMENT & REVIEW/ CONTROL Implementing control mechanism Sustenance (Review & Assessment) Replication Jul10 Aug10 Sep10 Oct10 Nov10 Dec10 Jan11

CTQ 1: FABRIC LEAD TIME REDUCTION AT FABRIC MILL

The Strategic supplier relationship management is required to Ensure the strategic partnership with fabric mills Ensure reduced fabric lead time by Vendor managed inventory Ensure improved service levels for fabric lead time and quality Ensure building base stock to service peak season demand

ANALYZE

An internal brainstorming session, helped to narrow down the Focus area for Deployment in spoke from

12 Spoke solution design


with strong core

IMPROVE

Supplier Segmentation
(Supplier wise strategy )

Vendor Connect
(IT Enablement)

Supplier Feedback

Supplier Forums
(Relationship Mapping)

HALF YEARLY FEEDBACK REPORT

SATISFACTIONSURVEY

CONTROL
After establishing Strategic supplier relationship, critical vendors identified based on following parameters for rationalization: Geographic Location Delivery, Quality, Cost VMI has been adopted for critical vendors by providing them Quarterly projections to deliver stock on-demand After implementing VMI, due to reduction in Fabric lead time and improved service levels, base stock was built to service
ESCALATION MATRIX
LEAD TIME VENDOR/ DELAY INCHARGE
14 Days 10 Days 7 Days 2 Days
Reorder Point Safety Stock

PURCHASE SOURCING MANAGER HEAD

BRAND HEAD

CTQ 2 : GMT MFG LEAD TIME REDUCTION AT FACTORY

The reduction in Garment manufacturing lead time is done by Ensure timely delivery of finished goods at warehouse against SLA Identifying potential causes for high manufacturing lead time Identifying root causes by using FMEA Implementing improvement solutions for those root causes Implementing controls to ensure that implemented solutions sustain

DIAGNOSING POTENTIAL ROOT CAUSES

An internal brainstorming session, helped to narrow down from 52 xs to more likely root causes for further analysis
Further, FMEA was carried out to help in prioritizing the potential root causes
Single pc clearance

FMEA FOR PRIORITIZING POTENTIAL ROOT CAUSES


2 main causes having highest RPNs were selected to work on
Probability of Occurrence

Cause

Severity Of Conseque nce

Difficulty of Detection

(A) Probability of (B) Occurrenc Consequen e ce

(C) Detection

Risk Priority No. (RPN)

(High / Medium / Low) Lack of work aid Mismatching of material Fabric Defect & Shade variation Low Medium Medium Medium Medium High High Medium Low Low Medium

Rating (1-6-9) 1 = lowest, 6 = medium, 9 = highest

AxBxC

Improper method due to lack of adherance to SOP Low Planning procedure leading to improper release of work orders High sectional WIP due to lack of adherance to WIP Norms Delay in single piece clearance due to lack of supervision

6 6 High RPN root 6 6 1 causes 486 and 729 respectively 6 9 1 are identified and action 1 9 taken to 6 reduce it

36 36 54 54

Medium

High

Medium

6
9

9
9

6
6

324
486

High

High

Medium

High

High

High

729

IMPROVEMENT
Delay in single piece clearance due to lack of supervision Tracking format implemented for tracking down the single piece in the section Operators and supervisors were educated to clear single piece Daily review for deviations
SINGLE PIECE CLEARANCE TRACKING

Results Statistical Validation


2-Variance test was done and since pvalue (0.498) is greater than 0.05, there is no significant change in the variation 2-sample t-test was done and since the p-value (0.002) is less than 0.05, there is significant reduction in single piece clearance time.

IMPROVEMENT
High Net WIP due to lack of adherance to WIP norms Section wise norms were fixed based on the daily production of section Implementation of pull system in WIP based WO release Daily review for deviations

Results Statistical Validation


2-Variance test was done and since pvalue (0.587) is greater than 0.05, there is no significant change in the variation 2-sample t-test was done and since the p-value (0.006) is less than 0.05, there is significant reduction in Net WIP (pcs)

FMEA FOR RESULT VALIDATION


Failure Mode Effect Analysis (FMEA) for Validating the solutions.
Cause Probabi lity Severit Difficul (A) (B) (C) Risk y Of ty of Poten Conse Detect Priority Conse Detecti tial quenc ion No. quence on e (RPN) Rating (1-6-9) 1 = lowest, 6 = medium, 9 = highest AxBx C Implemented Preventive Action (A1) (B1) (C1) Residu Proba Severi Detec al No. bility ty tion A1 x B1 x C1

(High / Medium / Low)

Low

Medium

High

54

Lack of work aid Mismatching of material Fabric Defect & Shade variation Improper method due to lack of adherance to SOP Planning procedure leading to improper release of work orders High sectional WIP due to lack of adherance to WIP Norms

Medium Medium Medium Low High High

Low Low Medium

6 6 1

6 9 9

1 1 6

36 54 54

With the implemented Rating (1-6-9) 1 = solution RPN of root lowest, 6 = medium, 9 = highest causes came down 1 to 6 9 from 486 and 729 54 respectively which validates the 6 6 1 effectiveness of 6 9 1 solution
1 9 6

54

36 54 54

Medium

High

Medium

324

Implementation of pull system, WIP based work order release system

36

High

High

Medium

486

Establishing section wise WIP norms and ensuring adherance to it Establishing single piece clearance tracking sheet and ensuring adherance to it

54
54

High
Delay in single piece clearance due to lack of supervision

High

High

729

CONTROL

Sheet to record details of all alterations of same product, different batches

On-site board for production monitoring , style description and daily wo clearance

Standard operating procedures in all sections to ensure the process adherence

Single piece clearance of monitoring on a day to day basis Regular training to operators on clearing single pieces on top-priority On-site board for supervisors to keep tracking single pieces and Section wise WIP Holding dispatch till 100% single pc clearance Weekly reviews by Production Manager for ensuring adherance to Section wise WIP norm and single pc clearance

BENEFITS : MFG LEAD TIME REDUCTION


Reduction in Suits average manufacturing lead time from 18 days to 12 days (0.4 times improvement)

2-Variance test was done and since pvalue is greater than 0.05, there is no significant change in the variation 2-sample t-test was done and since the p-value is less than 0.05, there is significant reduction in throughput time.

Two-Sample T-Test and CI: After Tpt time, Before Tpt time Two-sample T for After vs Before N Mean StDev SE Mean After 4 12.50 2.65 1.3 Before 9 29.44 6.37 2.1 Difference = mu (After) - mu (Before) Estimate for difference: -16.9444 95% upper bound for difference: -12.4122 T-Test of difference = 0 (vs <): T-Value = -6.78 P-Value = 0.000 DF = 10

CTQ 3: FG INVENTORY REDUCTION AT WAREHOUSE

The Warehouse replenishment system for finished goods to warehouse required to Ensure work orders are created to fill the inventory gap at warehouse Ensure that replenishment is aligned to sales as per pull model Ensure that inventory carrying cost of finished goods is reduced

IMPROVE
Retail Store
2 Days

Entoma Warehouse (Retail)

1 Day

Factory Warehouse
11 Days against SLA

Wo Release
Forecasting/ WH Stock Gap against Norm
Every Monday

1 Day

Productio n Plan for filling Gap


Every Tuesday

Pre-production activity (1 Days)

Fabrics & Trims in-stock

Wo Creation
Every Tuesday

Warehouse replenishment approach to provide the brands with a competitive advantage of Replenishment Model, which characterizes Planning Horizon of fortnight with Weekly Wave Model of Work Ordering and Delivery cycle

IMPROVE (Contd)
Work ordering cycle : Weekly (on every Tuesday), Delivery cycle : 12 working days from day of work order creation for blazers/ Suits MOQ per style code : 10 pcs (based on cutting and marker laying efficiency) Fabric Norm: 1 month of sales Warehouse Norm: 1 month of sales 300 Assessment Mechanism (Daily) OTIF Lead Time Review Mechanism (Quarterly) WH Inventory Fabric Inventory Service level Agreement
0 May Jun Jul Aug Sep Oct

MF&L INVENTORY REPLENISHMENT MODEL (MONTH ON MONTH) - AW


250

200

100

Safety Stock Building

150

Jun + Jul Requirement Building

GAP REPLENISHMENT

50

CONTROL
For process, Smart Transactional Excel Macros were developed for: Monitoring Retail Sales Monitoring Retail Inventory Monitoring WH Inventory Monitoring Gap in WH inventory against Norm due to retail sales Work order need to be created based on gaps on weekly basis

Based on the Scenarios, work order were created to replenish the gap in warehouse inventory

To improve the transparency in work order execution as control sheet, Daily status is sent to all stakeholders
Escalation matrix established for handling lead time delays
ESCALATION MATRIX
LEAD TIME SUPERVISOR PRODUCTION FACTORY DELAY MANAGER MANAGER
4 Days 3 Days 2 Days 1 Day

HEAD OF MFG

Daily Status of Work orders were sent to brands for ensuring the transparency in work order execution

BENEFITS : FG INVENTORY REDUCTION


Reduction in Suits inventory from 9 months to 2 months (4.5 times improvement)

2-Variance test was done and since pvalue is greater than 0.05, there is no significant change in the variation 2-sample t-test was done and since the p-value is less than 0.05, there is significant reduction in inventory

Two-Sample T-Test and CI: After Inventory, Before Inventory Two-sample T for After Inventory vs Before Inventory SE N Mean StDev Mean After Inventory 7 72.4 28.4 11 Before Inventory 5 208.6 68.8 31 Difference = mu (After Inventory) - mu (Before Inventory) Estimate for difference: -136.171 95% upper bound for difference: -66.697 T-Test of difference = 0 (vs <): T-Value = -4.18 P-Value = 0.007 DF = 4

CTQ 4: SALES IMPROVEMENT AT RETAIL STORE

The Retail replenishment system for finished goods to retail stores is required to Ensure timely delivery of finished goods at retail store against SLA Ensure STO are created to fill the inventory gap at retail stores Ensure that replenishment is aligned to sales as per pull model Ensure that sale of finished goods is improved

IMPROVE
Provide information on store traffic, demand patterns, gaps in merchandise Provide with weekly control reports to monitor inventory and store look

Retail replenishment approach would ensure that local customer preferences as well as brands targeted sales is maintained...

IMPROVE
Retail management system -Micro strategy and Business warehouse was implemented in year 2009 to provide transparency across the 68 retail stores of LP Store Sales Store Inventory In-transit inventory To replenish retail stock in northern and western region, couriers are used to reduce replenishment time within 3 days All India One Stock (AIOS) system deployed for crossdocking, one retail store to another retail store
Business warehouse software to monitor in-transit inventory and AIOS system

Micro strategy software to monitor store sales, inventory

CONTROL
For process, Out-of-stock and Transit time is monitored and reviewed on daily basis based on: Retail Sales Retail Inventory Retail inventory norm Monitoring gap in Retail inventory against Norm Stock transfer order need to be created based on gaps Escalation matrix established for handling transit time delays

Store Transit Time (Days) APK TN/ KERALA WEST NORTH AVERAGE

Before 2.56 2.45 6.28 7.43 4.68

After 1.38 1.28 2.96 3.21 2.21

% Improvement 46.09% 47.76% 52.87% 56.80% 52.83%

ESCALATION MATRIX
OUT OF STOCK
4 Days 3 Days 2 Days 1 Day

VENDOR/ INCHARGE

RETAIL MERCHANT

RETAIL HEAD

BRAND HEAD

Month Jul Aug Sep Oct Nov Dec

Norm 1367 1367 1367 2734 2734 2734

(IN PCS) Actual Out-ofStock stock 932 435 830 537 1067 300 2568 166 2876 0 2754 0

Sales Loss % 32% 39% 22% 6% 0% 0%

BENEFITS : SALES IMPROVEMENT


Increase in Suits retail sales from avg 400 pcs sales to avg 785pcs in peak season (2 times improvement)

2-Variance test was done and since pvalue is greater than 0.05, there is no significant change in the variation
2-sample t-test was done and since the p-value is less than 0.05, there is significant improvement in sales

Two-Sample T-Test and CI: Before Sale, After Sale Two-sample T for Before Sale vs After Sale SE N Mean StDev Mean Before Sale 12 174.7 43.0 12 After Sale 3 717.7 38.7 22 Difference = mu (Before Sale) - mu (After Sale) Estimate for difference: -543.000 95% upper bound for difference: -482.904 T-Test of difference = 0 (vs <): T-Value = -21.26 P-Value = 0.000 DF = 3

OVERALL BENEFIT

FINANCIAL BENEFIT FOR SUITS & BLAZER IN RETAIL CHANNEL BUDGETED SALES PROJECTION (JAN11-DEC11) 3375 pcs (Rs. 1.68 crores/ Annum) DUE TO RETAIL REPLENISHMENT, 40% REDUCTION IN BUDGETED SALES LOSS
NOV10- JAN11 ACTUAL SALES IMPROVEMENT 800 PCS, ACTUAL EXTRA REVENUE Rs20 Lacs

EXPECTED SALES IMPROVEMENT DUE TO RETAIL REPLENISHMENT 1350 pcs/ Annum EXPECTED PROFIT DUE TO SALES IMPROVEMENT Rs33.6 Lacs/ Annum (Profit@Rs 2500/pc)

NET LEAD TIME REDUCTION


(FABRIC + MANUFACTURING + RETAIL REPLENISHMENT) LEAD TIME BEFORE, 105 + 18 + 7 (Max in case of Delhi) 130 Days AFTER, 15+12+3 (Max in case of Delhi) 30 Days IMPROVEMENT IN LEAD TIME 4 TIMES

FUTURE ROADMAP
Automating the mechanism for forecasting Channel wise sales trend by identifying the best tool among the several tools by Q1

Automating the process of setting the inventory norm across the supply chain quarterly by Q1
Automating the transaction, which triggers the stock transfer order, work order for style codes and purchase order for fabric codes by Q2 Increasing the Scope of this project to different products and channels
BRAND
LP LP LP LP LP LP VH VH VH VH VH VH

CHANNEL
RETAIL TRADE RETAIL TRADE RETAIL TRADE RETAIL TRADE RETAIL TRADE RETAIL TRADE

PRODUCT
S&B S&B SHIRT SHIRT TROUSER TROUSER S&B S&B SHIRT SHIRT TROUSER TROUSER

EXP TIME
Q1 Q2 Q2 Q1 Q1 Q1 Q1 Q1 Q1 Q2 Q2

THANK YOU

SUPPORTING DATA
NORMS CALCULATION FOR FABRIC & FG REORDER POINT = SAFETY STOCK + AVERAGE DEMAND DURING LEAD TIME
SAFETY STOCK = SERVICE LEVEL x STD DEV OF PROJECTION x SQRT(LEAD TIME)

NORMS CALCULATION FOR RETAIL STORE


RETAIL INVENTORY NORM = 5 x BUDGETED SALES (ADOPTED BY MKTNG DEPTT)

FORECAST FOR LP CORE STYLE CODES

LINEAR REGRESSION

X Variable 1 Line Fit Plot


1,400 1,200 1,000 800 Y 600 400 200 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 X Variable 1 Y Predicted Y

Y = AX + B

A = 5.0852174 B = 632.18478

MONTHLY ADJUSTMENT

2008-09 APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH 676 580 577 610 752 423 669 1,009 985 1,014 845 374

2009-10 379 400 487 745 781 458 494 1,029 1,016 1,308 714 373

MTH. AVE 528 490 532 678 767 441 582 1,019 1,001 1,161 780 374

CUM AVE 696 696 696 696 696 696 696 696 696 696 696 696

MONTHLY FACTOR 0.758174632 0.704022989 0.764367816 0.97341954 1.101293103 0.632902299 0.835488506 1.46408046 1.4375 1.668103448 1.119971264 0.536637931

ADJUSTED FORECAST

2010-11(R) APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH 759 764 769 775 780 785 790 795 800 805 810 815

2010-11(A) 576 538 588 754 859 497 660 1164 1150 1343 907 437

1,000

1,200

1,400

1,600

200

400

800

600

0 APR 2008 MAY 2008 JUN 2008 JUL 2008 AUG 2008 SEP 2008 OCT 2008 NOV 2008 DEC 2008 JAN 2009

GRAPH

FEB 2009
MAR 2009 APR 2009 MAY 2009 JUN 2009 JUL 2009 AUG 2009 SEP 2009 OCT 2009 NOV 2009 DEC 2009 JAN 2010 FEB 2010

MAR 2010
APR 2010 MAY 2010 JUN 2010 JUL 2010 AUG 2010 SEP 2010 OCT 2010 NOV 2010 DEC 2010 JAN 2011 FEB 2011 MAR 2011

SALES % CALCULATION
AVERAGE 326 Sales% 44.10%

BRAND LP CORE

ROLL DOWN

BRAND SALES%

APR 2010

MAY 2010

JUN 2010

JUL 2010

AUG 2010

SEP 2010

OCT 2010

NOV 2010

DEC 2010

JAN 2011

FEB 2011

MAR 2011

576

538

588

754

859

497

660

1164

1150

1343

907

437

LP

44.10%

254

237

259

333

379

219

291

513

507

592

400

193

ROLL DOWN (LAST YEAR %)

APR 2010

MAY 2010

JUN 2010

JUL 2010

AUG 2010

SEP 2010

OCT 2010

NOV 2010

DEC 2010

JAN 2011

FEB 2011

MAR 2011

576

538

588

754

859

497

660

1164

1150

1343

907

437

LP

43.28%

249

233

255

326

372

215

286

504

498

581

393

189

ROLL DOWN (LAST YEAR % M-O-M)

APR 2010

MAY 2010

JUN 2010

JUL 2010

AUG 2010

SEP 2010

OCT 2010

NOV 2010

DEC 2010

JAN 2011

FEB 2011

MAR 2011

576 LP(%) LP 45.12% 260

538 53.25% 287

588 64.89% 382

754 45.23% 341

859 58.00% 498

497 58.30% 290

660 55.06% 363

1164 45.77% 533

1150 32.78% 377

1343 27.98% 376

907 35.71% 324

437 69.44% 304

COMPARISON OF ROLL-DOWN METHODS w.r.t LP

APR
LP CORE 200910

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

JAN

FEB

MAR

171
LP CORE 201011

213

316

337

453

267

272

471

333

366

255

259

254

237

259

333

379

219

291

513

507

592

400

193

LP CORE 2010-11(LY SP)

249

233

255

326

372

215

286

504

498

581

393

189

LP CORE 201011(LY SP M-OM)

260

287

382

341

498

290

363

533

377

376

324

304

SIMPLE REGRESSION MODEL EXAMPLE FOR A DEPARTMENT SOTRE:


YEAR QUARTER 1 1 2 3 4 1 2 2 3 4 SALES (RS.1,000) 20 30 50 70 30 40 60 80 4 3 YEAR QUARTER 1 2 3 4 1 2 3 4 SALES (RS.1,000) 40 60 80 90 50 80 90 100

TREND LINE : Y = a + bt y-b t Where, a n


b n ty n

t2

t y t
2

ty

y2

t2

ty

y2

t2

1
2 3 4 5 6 7 8

20
30 50 70 30 40 60 80

20
60 150 280 150 240 420 640

400
900 2500 4900 900 1600 3600 6400

1
4 9 16 25 36 49 64

9
10 11 12 13 14 15 16

40
60 80 90 50 80 90 100

360
600 880 1080 650 1120 1350 1600

1600
3600 6400 8100 2500 6400 8100 1000 0

81
100 121 144 169 196 225 156

y = 970, t = 136, ty = 9600, y2 = 67,900 and t2 = 1496


b (16) (9600) - (136) (970) 3.9853 2 (16) (1496) - (136)

970 - (3.9853)(136) a 26.75 2 (16) y 26.75 3.98553 t

125

PROJECTED TREND LINE


TREND LINE Y = 26.75 + 3.9853{T)

100

75
FORECAST ADJUSTED SEASONAL VARIATIONS

50 ACTUAL SALES

25

12

16

SEASONAL ADJUSTMENTS:
T ACTUAL SALES y 20 30 50 70 SALES ESTIMATED 30.73 34.72 38.70 42.69 Y % t ACTUAL SALES 80 90 50 80 SALES ESTIMATED 70.59 74.57 78.55 82.52 Y 133.34 120.69 63.65 96.92

1 2 3 4

65.008 86.40 129.19 163.97

11 12 13 14

5
6 7 8 9 10

30
40 60 80 40 60

46.67
50.66 54.64 58.63 62.61 66.60

64.28
78.95 109.80 136.44 63.88 90.09

15
16 17 18 19 20

90
100

86.53
90.51 94.50 98.48 102.47 106.64

104.48
110.48

SEASONAL ADJUSTMENT FACTOR: QUARTER SEASONAL ADJUSTMENT FACTOR

1 2 3 4

65.08 64.28 63.88 63.65 64.22% 4 86.40 78.95 90.09 96.92 88.09% 4 129.19 09.80 113.34 104.01 114.08% 4 163.97 136.44 120.69 110.48 132.89% 4

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