Analyzing Forecasting and Inventory Management at Rohit Automobiles

This report focuses on forecasting and inventory management at Rohit Automobiles, a fuel station owned by Indra Ghosh. The student, Rohit Ghosh, examines the current inventory management practices with the intention of replacing the current simple rules of thumb with a more rational and complex planning model. The report analyzes past trends, seasonality, and event-based forecasting techniques. It emphasizes the importance of accurate data, including shipment data over demand data, and the use of models like EOQ to minimize holding costs and optimize the re-ordering process. The report also discusses the importance of forecasting events, promotional activities, and special orders to create the shape and size of the demand related to the business and tries to use it as the building blocks. The goal is to reduce inventory levels while maintaining a high customer service level. The report references a research paper by Babel, Mukand S., Nisuchcha Maporn, and Victor R. Shinde, which incorporates future climatic and socioeconomic variables in water demand forecasting.

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Student Name,
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Complete Solution
Forecasting idea is all about the right data. The data should add forecasts built on the
most appropriate historical data. According to at el (2014) who is a research analyst, the
company should not take net sale sales into the historical data which might be inaccurate. What
if the product is returned? This may create an inaccurate data. The company should have an
inventory to meet its customers demand and to compete with the opposition, regardless of later
returns. The company should try and use a shipment data over the demand data, the reason being
that shipment data is more accurate because it will be shipped and not just an order their
customers will make. The company should use these techniques to forecast the demand and
future development of the business.
Past Trends
In any business growth market, the statistic trend forecasting may give a better
knowledge of how the business demand is heading to. Working on the assumption that history is
recreated in the coming work in the time of stability. Nevertheless, the company owners still
need to be in adjusting with the business general market to authenticate the estimates. If the
company is able to accurately forecast its prime position to capture a larger share of the market.
Seasonality

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The business seasonality event can also create frequent fluctuations, which can be
repeated in years at some time with some equal strength. According to cyclical patterns of
demand where other seasons of the year are higher or lower than others, this model will be best
suited for repeat events.
Actions
A statistical model based on the events refers to know circumstances, which might result
in the business high or low data points, different of the expected demand pattern. More frequent
than expected, the events can be specified for some business and company- from promotional
activities, frequent out sales and special orders, to stock-out, natural disasters, and special
business occasions.
It will be of great advantage if the company begins with forecasting around the events for
itself. This will help create the shape and size of the demand related to the business and tries to
use it as the building blocks. The company can then use these building blocks to schedule in
what they will occur in the simultaneous events, where they can be stacked on top of other.
Therefore, instead of the company projecting a straight- line forward, it can start building overall
forward views.
EOQ will be effective for the company equipment where massive turns over of raw
materials can be used in production, even though the company is providing retail mail order
service. When the company uses EOQ this will help minimize the cost of holding the record,
which might also include the re-ordering and repeated transportation. The company can
determine the EOQ by keeping order and hold the cost at an optimum level and that will reduce
the general cost of manufacturing which will improve the bottom line of the balance sheet.

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Works Cited
Babel, Mukand S., Nisuchcha Maporn, and Victor R. Shinde. "Incorporating Future Climatic and
Socioeconomic Variables in Water Demand Forecasting: A Case Study in Bangkok."
Water Resources Management, vol. 28, no. 7, 2014, pp. 2049-2062. ProQuest,
https://search.proquest.com/docview/1519823320?accountid=45049,
doi:http://dx.doi.org/10.1007/s11269-014-0598-y.