Answered: PRICE PER CHIP PRICE PER CHIP MONTH…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

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:

a) Use a 2-month moving average on all the data and plot the
averages and the prices.
b) Use a 3-month moving average and add the 3-month plot to
the graph created in part (a).
c) Which is better (using the mean absolute deviation): the
2-month average or the 3-month average?
d) Compute the forecasts for each month using exponential
smoothing, with an initial forecast for January of $1.80. Use a
= .1, then a = .3, and finally a = .5. Using MAD, which a
is the best?

PRICE PER
CHIP
PRICE PER
CHIP
MONTH
MONTH
January
$1.80
July
1.80
February
1.67
August
1.83
March
1.70
September
1.70
April
1.85
October
1.65
May
1.90
November
1.70
June
1.87
December
1.75

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