Problem 1: Auto sales at Carmen’s Chevrolet are shown below. Develop a 3-week mo
ID: 362777 • Letter: P
Question
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 Two weeks 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 2003 sales.
Year Sales (Units)
1996 100
1997 110
1998 122
1999 130
2000 139
2001 152
2002 164
To minimize computations, transform the value of x (time) to simpler numbers. In this case, designate year 1996 as year 1, 1997 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, 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.
Explanation / Answer
Problem 1
A three period moving average method averages the actual value for the previous three periods to generate the forecast for the next period. This can be calculated using the following formula : Sum of the actual value for the previous three periods / 3
Using the above formula the forecast for week 4 through 7 are: