Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Transcribed Image Text:4.4 A check-processing center uses exponential smooth-
ing to forecast the number of incoming checks each month. The
number of checks received in June was 40 million, while the fore-
cast was 42 million. A smoothing constant of .2 is used.
a) What is the forecast for July?
b) If the center received 45 million checks in July, what would be
the forecast for August?
c) Why might this be an inappropriate forecasting method for
this situation? Px
.. 4.5 The Carbondale Hospital is considering the purchase
of a new ambulance. The decision will rest partly on the antici-
pated mileage to be driven next year. The miles driven during the
past 5 years are as follows:
YEAR
1
2
3
4
5
a) Forecast the mileage for next year (6th year) using a 2-year
moving average.
b) Find the MAD based on the 2-year moving average. (Hint:
You will have only 3 years of matched data.)
c) Use a weighted 2-year moving average with weights of 4
and .6 to forecast next year's mileage. (The weight of .6 is
for the most recent year.) What MAD results from using this
approach to forecasting? (Hint: You will have only 3 years of
matched data.)
MILEAGE
3,000
4,000
3,400
3,800
3,700
d) Compute the forecast for year 6 using exponential smoothing,
an initial forecast for year 1 of 3,000 miles, and a 5. Px
4.6 The monthly sales for Yazici Batteries, Inc., were as
follows:
MONTH
January
February
March
April
May
June
July
August
September
October
November
December
SALES
20
21
15
14
13
16
17
18
20
20
21
23
E
lo
C
P
d
C
0
0
a
b
C
.
W
a
b
C
d
e
.
C
W
Transcribed Image Text:a) Plot the monthly sales data.
b) Forecast January sales using each of the following:
i) Naive method.
ii) A 3-month moving average.
iii) A 6-month weighted average using .1, 1, 1, 2, .2, and 3.
with the heaviest weights applied to the most recent months.
iv) Exponential smoothing using an a = .3 and a September
forecast of 18.
v) A trend projection.
c) With the data given, which method would allow you to fore-
cast next March's sales? P
.. 4.7 The actual demand for the patients at Omaha
Emergency Medical Clinic for the first 6 weeks of this year fol-
lows:
WEEK
1
2
3
4
5
6
Clinic administrator Marc Schniederjans wants you to forecast
patient demand at the clinic for week 7 by using this data. You
decide to use a weighted moving average method to find this fore-
cast. Your method uses four actual demand levels, with weights
of 0.333 on the present period, 0.25 one period ago, 0.25 two peri-
ods ago, and 0.167 three periods ago.
a) What is the value of your forecast? Px
b) If instead the weights were 20, 15, 15, and 10, respectively, how
would the forecast change? Explain why.
c) What if the weights were 0.40, 0.30, 0.20, and 0.10, respec-
tively? Now what is the forecast for week 7?
.
4.8 Daily high temperatures in St. Louis for the last week
were as follows: 93, 94, 93, 95, 96, 88, 90 (yesterday).
a) Forecast the high temperature today, using a 3-day moving
average.
b) Forecast the high temperature today, using a 2-day moving
average.
c) Calculate the mean absolute deviation based on a 2-day mov-
ing average.
d) Compute the mean squared error for the 2-day moving average.
e) Calculate the mean absolute percent error for the 2-day mov-
ing average. P
ACTUAL NO. OF
PATIENTS
65
62
70
48
63
52
4.9 Lenovo uses the ZX-81 chip in some of its laptop
computers. The prices for the chip during the past 12 months.
were as follows:
MONTH
January
February
March
April
May
June
PRICE PER
CHIP
$1.801 July
1.67
1.70
1.85
1.90
1.87
MONTH
August
September
October
November
December
PRICE PER
CHIP
1.80
1.83
1.70
1.65
1.70
1.75
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