Problemas

Practice Problems: Chapter 4, Forecasting

Problem 1:

Auto sales at Carmen’s Chevrolet are shown below. Develop a 3-week moving average.

Week Auto Sales

1 8

2 10

3 9

4 11

5 10

6 13

7 -

Problem 2:

Carmen’s decides to forecast auto sales by weighting the three weeks as follows:

Weights Applied Period

3 Last week

2 Twoweeks ago

1 Three weeks ago

6 Total

Problem 3:

A firm uses simple exponential smoothing with to forecast demand. The forecast for the week of January 1 was 500 units whereas the actual demand turned out to be 450 units. Calculate the demand forecast for the week of January 8.

Problem 4:

Exponential smoothing is used to forecast automobile battery sales. Two value of are examined, and Evaluate the accuracy of each smoothing constant. Which is preferable? (Assume the forecast for January was 22 batteries.) Actual sales are given below:

Month Actual Battery Sales Forecast

January 20 22

February 21

March 15

April 14

May 13

June 16

Problem 5:

Use the sales data given below to determine: (a) the least squares trend line, and (b) the predicted value for 2008 sales.

Year Sales (Units)

2001 100

2002 110

2003 122

2004 130

2005 139

2006 152

2007 164

To minimize computations, transform the value of x (time) to simpler numbers. In this case, designate year 2001 as year 1, 2002 as year 2, etc.

Problem 6:

Given the forecast demand and actual demand for 10-foot fishing boats, compute the tracking signal and MAD.

Year Forecast Demand Actual Demand

1 78 71

2 75 80

3 83 101

4 84 84

5 88 60

6 85 73

Problem: 7

Over the past year Meredith and Smunt Manufacturing had annual sales of 10,000 portable water pumps. The average quarterly sales for the past 5 years have averaged: spring 4,000, summer 3,000, fall 2,000 and winter 1,000. Compute the quarterly index.

Problem: 8

Using the data in Problem 7, Meredith and Smunt Manufacturing expects sales of pumps to grow by 10% next year. Compute next year’s sales and the sales for each quarter.

ANSWERS:

Problem 1:

Week Auto Sales Three-Week Moving Average

1 8

2 10

3 9

4 11 (8 + 9 + 10) / 3 = 9

5 10 (10 + 9 + 11) / 3 = 10

6 13 (9 + 11 + 10) / 3 = 10

7 - (11 + 10 + 13) / 3 = 11 1/3

Problem 2:

Week Auto Sales Three-Week Moving Average

1 8

2 10

3 9

4 11 [(3*9) + (2*10) + (1*8)] / 6 = 9 1/6

5 10 [(3*11)

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