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Operation Management Problems Agm2311

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Practice Problems: Chapter 4, Forecasting 4 Problem 1: Auto sales at Carmen’s Chevrolet are shown below. Develop a 3-week moving average. Week Auto Sales 1 9 2 14 3 12 4 7 5 9 6 11 7 - Moving average =  demand in previous n periods n 3-week moving average from Excel 2013. Week 3-week moving Auto Sales average 1 9 2 14 3 12 11.66666667 4 7 11 5 9 9.333333333 6 11 9 7 6.666666667 1 Problem 2: Using the data from #1, 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 Weighted moving average = Week  (weight for period n)(demand in period n)  weights 3-week moving Auto Sales average 1 9 2 14 3 12 12.16666667 4 7 9.833333333 5 9 8.833333333 6 11 9.666666667 7 5.17 Problem 3: A firm uses simple exponential smoothing with alpha = 0.3 to forecast demand. The forecast for the week of January 1 was 500 units whereas the actual demand turned out to be 420 units. Calculate the demand forecast for the week of January 8. Ft =Ft-1 +a(At-1-Ft-1) Where: 2 Ft=Forecast for January 8 week Ft-1= Forecast for January 1 week A=alpha At-1= Actual for January 1 week Forecast for January 8 week= 500+0.3(420-500) =500+0.3(-80) =500-24=476 units Problem 4: Exponential smoothing is used to forecast automobile battery sales. Two value of  are examined, alpha = 0.3 and alpha = 0.5. Evaluate the accuracy of each smoothing constant. Which is prefer ...
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