Income at the architectural firm Spraggins and Yunesfor the period February to July was as follows:...4.19FEBRUARY MARCH APRIL MAY JUNE JULY64.8 71.7 71.3 72.8MONTHIncome(in $ thousand)70.068.5Use trend-adjusted exponential smoothing to forecast the firm'sAugust income. Assume that the initial forecast average forFebruary is $65,000 and the initial trend adjustment is 0. Thesmoothing constants selected are a = .1 and 3 = .2. Px...4.20 Resolve Problem 4.19 with a = .1 and 3 = .8. UsingMSE, determine which smoothing constants provide a betterforecast. PX

Formulae used: The trend-adjusted exponential forecasting is given by AFt = Ft + Tt Where, Ft =…

Answered: ...4.19 Income at the architectural…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section: Chapter Questions

Problem 42P: The file P13_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars)...

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Under what conditions might a firm use multiple forecasting methods?
The Baker Company wants to develop a budget to predict how overhead costs vary with activity levels. Management is trying to decide whether direct labor hours (DLH) or units produced is the better measure of activity for the firm. Monthly data for the preceding 24 months appear in the file P13_40.xlsx. Use regression analysis to determine which measure, DLH or Units (or both), should be used for the budget. How would the regression equation be used to obtain the budget for the firms overhead costs?
The file P13_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars) through credit unions. a. Use these data to forecast consumer revolving credit through credit unions for the next 12 months. Do it in two ways. First, fit an exponential trend to the series. Second, use Holts method with optimized smoothing constants. b. Which of these two methods appears to provide the best forecasts? Answer by comparing their MAPE values.
Q1: Income at the architectural firm Spraggins and Yunes for the period February to July was as follows: Month February March April May June July 72.8 Income (in $ 70.0 thousand) 68.5 64.5 71.7 71.3 Use trend-adjusted exponential smoothing to forecast the firm's August income. Assume that the initial forecast average for February is $65,000 and the initial trend adjustment is 0. The smoothing constants selected are a = .1 and B =.2.
1. Solve manually. a. Income at the law firm Smith and Wesson for the period February to July was as follows: Month Feb Mar Аpr May June July Income $ 70.00 71.30 (in thousand) 68.50 64.30 71.70 72.8 Use trend-adjusted exponential smoothing to forecast the law firm's August income. Assume that the initial forecast for February is $65,000 and the initial trend adjustment is 0. The smoothing constants selected are alpha = 0.1 and beta = 0.2 %3D
Consider the following sales data for Bell, Inc. Month Sales ($ Millions) Jan. 10 Feb. 12 March 14 April 16 May 18 June 23 July 26 Aug. 31 Sept. 27 Oct. 18 Nov. 16 Dec. 14 a. Use a three-month weighted moving average to forecast the sales for the months April through December. Use weights of (3/6), (2/6), and (1/6), giving more weight to more recent data. b. Use exponential smoothing with α = 0.30 to forecast the sales for the months April through December. The forecast for January was $12 million. c. Compare the performance of the two methods by using the bias and MAD as the performance criteria. Which performance method is the most reasonable? Why?
12-1. The Hartley-Davis motorcycle dealer in the Minneapolis- St. Paul area wants to be able to forecast accurately the de- mand for the Roadhog Super motorcycle during the next month. From sales records, the dealer has accumulated the data in the following table for the past year. Month January February March April Мay June Motorcycle Sales 7 10 8 7 12 July August September 10 11 12 October 10 November December 14 16 a Compute a three-month moving average forecast of demand for April through January (of the next year). b. Compore a five-month moving average forecast for June drough January. c. Compare the two forecasts computed in parts (a) and (b) using MAD. Which one should the dealer use for January of dhe next year?
B). Using exponential smoothing, calculate the forecasts for months 2, 3, 4, 5, and 6. The smoothing constant is 0.2, and the old forecast for month I is 245. Month Actual Demand Forecast Demand 1 260 2. 230 3 225 4 245 5 250 6. C). Given the following average demand for each month, calculate the seasonal indices for each month. Month Average Demand Seasonal Index January 30 February 50 March 85 April 110 May 125 June 245 July 255 August 135 September 100 October 90 November 50 December 30 Total 3 D). Using the data in part A and the seasonal indices you have calculated, calculate expected monthly demand if the annual forecast is 2000 units. Month Seasonal Forecast Index January February March April May June July August September October November December
Income at the architectural firm Spraggins andYunes for the period February to July was as follows: Use trend-adjusted exponential smoothing to forecast thefirm’s August income. Assume that the initial forecast averagefor February is $65,000 and the initial trend adjustmentis 0. The smoothing constants selected are a = .1 andb = .2.
4. The sales (in millions of dollars) for a 15-month period are as follows. Month Sales Month Sales 390 9 470 2 565 10 1000 3 395 11 490 450 12 485 490 13 525 560 14 550 7 420 15 530 8. 565 a. Compare a three-month moving average forecast with an exponential smoothing forecast. Use a = 0.2. Find MSE for both methods. b. Which provides the better forecasts based on MSE? C. Find the forecast for the next month using the best forecast method. 5.
A manager uses a trend equation plus quarterly relatives to predict demand. Quarter relatives areSR1 = .90, SR2 = .95, SR3 = 1.05, and SR4 = 1.10. The trend equation is: Ft= 10 + 5t. Over thepast nine quarters, demand has been as follows:Period, t 1 2 3 4 5 6 7 8 9Demand 14 20 24 31 31 37 43 48 52Is the forecast performing adequately? Explain.
Specific motors produces electronic motors for power-actuated valves for the Medicalconstruction industry. Specific's production plant has operated at near capacity forover a year now. JOSEPH Bakkabulindi, the plant manager thinks that the growth insales will continue, and he wants to develop a long- range forecast to be used to planfacility requirements for the next 3 years. Sales records for the past 10 years havebeen accumulated: N.B: Show all the workings. Solve with Linear regression. Year Annual sales (000's of units) Year Annual sales (000's of units 1 500 6 1,000 2 650 7 1,100 3 900 8 1,300 4 1,000 9 1,450 5 1,000 10 1,600

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