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Homework 1

This document contains productivity data for two weeks at a company. Week 1 had higher total productivity (4.92) than Week 2 (4.58), as measured by total factor productivity combining all inputs. The growth rate from Week 1 to Week 2 was -6.91%. The document also contains answers to questions on time series forecasting methods, showing the simple exponential smoothing method provided the best forecasts based on measures like mean absolute deviation and mean squared error.

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Shawn Harrington
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27 views8 pages

Homework 1

This document contains productivity data for two weeks at a company. Week 1 had higher total productivity (4.92) than Week 2 (4.58), as measured by total factor productivity combining all inputs. The growth rate from Week 1 to Week 2 was -6.91%. The document also contains answers to questions on time series forecasting methods, showing the simple exponential smoothing method provided the best forecasts based on measures like mean absolute deviation and mean squared error.

Uploaded by

Shawn Harrington
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Patrick Doran

Question 1
Question 2
(1) Week
a.
b.
c.
d.
e.

1
Partial Productivity
Labor (units/hour) = 48,000/3,000 = 16 units/hour
Labor (dollars/hour) = ((12.5)(48,000))/3,000 = 200 dollars/hour
Material (dollars/pound) = ((12.5)(48,000))/2500 = 240 dollars/pound
Material (dollars/dollar) = ((12.5)(48,000))/((14)(2,500) = 17.14
dollars/dollar
f. Capital (units/dollar) = 48,000/50,000 = 0.96 units/dollar
g. Multi-Factor Productivity
h. Labor and material (dollars/dollar) = ((12.5)(48,000))((3,000*10) +
(2,500*14)) = 9.43 dollars/dollar
i. Energy and Capital (units/dollar) = (48,000)/(5,000 + 50,000) = 0.87
units/dollar
j. Non-Capital (dollars/dollar) = (12.5*48,000)/
((3,000*10)+(2,500*14)+(5,000)+(2,000)) = 8.33 dollars/dollar
k. Total Productivity
l. All Inputs Combined (dollar/dollar) = (12.5*48,000)/
((10*3,000)+(2,500*14)+5,000+50,000+2,000) = 4.92 dollar/dollar
Week 2
m. Partial Productivity
n. Labor (units/hour) = 60,000/4,000 = 15 units/hour
o. Labor (dollars/hour) = ((11.0)(60,000))/4,000 = 165 dollars/hour
p. Material (dollars/pound) = ((11.0)(60,000))/3,000 = 220 dollars/pound
q. Material (dollars/dollar) = ((11.0)(60,000))/((15)(3,000) = 14.67
dollars/dollar
r. Capital (units/dollar) = 60,000/50,000 = 1.20 units/dollar
s. Multi-Factor Productivity
t. Labor and material (dollars/dollar) = ((11.0)(60,000))((4,000*10) +
(3,000*15)) = 7.76 dollars/dollar
u. Energy and Capital (units/dollar) = (60,000)/(6,000 + 50,000) = 1.07
units/dollar
v. Non-Capital (dollars/dollar) = (11.0*60,000)/
((4,000*10)+(3,500*14)+(6,000)+(3,000)) = 7.02 dollars/dollar
w. Total Productivity
x. All Inputs Combined (dollar/dollar) = (111.0*60,000)/
((10*4,000)+(3,000*14)+6,000+50,000+3,000) = 4.58 dollar/dollar
Measure

Week 1

Week 2

----------------------------------------------------------------------------------------------------------

Partial productivity:
Labor (units/hour)

16

15

Labor (dollars/hour)

200

165

Material (dollars/pound)

240

220

Material (dollars/dollar)

17.14

14.67

Capital (units/dollar)

0.96

1.20

Labor and material (dollars/dollar)

9.43

7.76

Energy and capital (units/dollar)

0.87

1.07

Non-capital (dollars/dollar)

8.33

7.02

4.92

4.58

Multi-factor productivity:

Total productivity:
All inputs combined (dollars/dollar)

-----------------------------------------------------------------------------------------------------------

(2)XYZ was more productive in week 1, because with all inputs combined, Total
Productivity was higher.
(3)Rweek2 = (4.58-4.92)/4.92 = -6.91%
Question 3
(1)

(2)

r
r
r
r
r
r
r
r
r

2003
2004
2005
2006
2007
2008
2009
2010
2011

=
=
=
=
=
=
=
=
=

(90.5-85.8)/85.8= .548 = 5.5%


(92.7-90.5)/90.5= .243 = 2.4%
(96.6-92.7)/92.7= .421 = 4.2%
(97.1-96.6)/96.6= .052 = 0.5%
(100.3-97.1)/97.1= .330 = 3.3%
(100.3-100.3)/100.3= .000 = 0.0%
(100.0-100.3)/100.3= -.030 = -0.3%
(106.2-100.0)/100.0= .620 = 6.2%
(107.0-106.2)/106.2= .075 = 0.8%

Yes the numbers are consistent

Question 4
(1) Ft = At-1 = 1,390,000

(2) Ft = (At-1 + At-2 + + At-n)/n = (1,390,000 + 1,168,500+1,198,400)/3 =


1,252,300 units
(3) Ft = w1At-1 + w2At-2 + + wnAt-n = ((.4*1,390,000) + (.3*1,168,500) +
(.15*1,198,400) + (.1*1,545,200) + (.05*1,356,800))/5 = 1372690 units
(4) Ft = Ft-1 + a(At-1 - Ft-1) = F3 = 1,146,400 units
F4 = 1,146,400 + 0.8(1,198,400 - 1146400) = 1188000 units
F5 = 1,188,000 + 0.8(1,168,500 1188000) = 1172400 units
F6 = 1,172,400 + 0.8(1,390,000 1172400) = 1346480 units
(5)

(6) All of mine were all the same except for the Simple exponential smoothing
method.

Question 5
(1)

Trend Projection method, because it matches the definition of a time series


gradual, long-term movement in the historical data
(2)
t

A(t)

t^2

tA(t)

85.8

85.8

90.5

181

92.7

278.1

96.6

16

386.4

97.1

25

485.5

100.3

36

601.8

100.3

49

702.1

100

64

800

106.2

81

955.8

10

107

100

1070

55

976.5

385

5546.5

n = 10
b = 10(5546.5) 55(976.5) / (10(385) (55^2) = 2.1303
a = (976.5 2.1303(55)]/10 = 85.9334

F(2012) = 85.9334 + 2.1303(11) = 109.3670 units


(3)

(4) Yes it is consistent with the manual solution


(5) 108.0
(6) My estimate in (2) was very close to the actual productivity. I was off by
1.2657%

Question 6
(1) Three Approaches
a. Naive = F7 = F6 = 8,600 hours
b. 3-month simple moving average = Ft = (At-1 + At-2 + + At-n)/n =
(8,000 + 7,400 + 8,600)/3 = 8,000 hours
c. Simple exponential smoothing = Ft = Ft-1 + a(At-1 - Ft-1) =
F2 = 8200 + 0.5(8200-8200) = 8200 hours
F3 = 8200 + 0.5(7800-8200) = 8000 hours
F4 = 8000 + 0.5(8400-8000) = 8200 hours
F5 = 8200 + 0.5(8000-8200) = 8100 hours
F6 = 8100 + 0.5(7400-8100) = 7750 hours
F7 = 7750 + 0.5(8600-7750) = 8,175 hours
Nave

Simple Moving
Average

t
1
2
3
4

At
8,200
7,800
8,400
8,000

Ft

et

8,200
7,800
8,400

400
-600
400

7,400

8,000

600

8,600

7,400

-1200

| e
t 1

Ft

et

8133.33
33
8066.66
67
7933.33
33

133.333
3
666.666
7
666.666
7

Simple
Exponential
Smoothing
Ft
et
8,200
0
8,200
400
8,000
-400
8,200
200
8,100

700

7,750

-850

(2) MAD =
a. Nave Method = (|400|+|-600|+|400|+|600|+|1200|)/5 = 640 hours
b. Simple Moving Average Method = (|133.3333|+|666.6667|+|666.6667|)/3= 488.8889 hours

c. Simple Exponential Smoothing Method = (|400|+|-400|+|200|+|700|


+|-850|)/6 = 425 hours
(3) Based on my findings, the Simple Exponential Smoothing Method provided
the best forecast of the time requirement.
(4)

(5) The computer solutions are identical


m

e
t 1

(6) MSE =

2
t

a. Nave Method = (400^2+-600^2+400^2+600^2+1200^2)/5 =


496000 hours^2
b. Simple Moving Average Method = (133.3333^2 +666.6667^2+666.6667^2)/3= 302222.2222 hours^2
c. Simple Exponential Smoothing Method = (400^2+400^2+200^2+700^2+-850^2)/6 = 262083.3 hours^2
(7) The simple exponential smoothing method, based on that it has the lowest
number.

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