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Chapter 3 Solutions

1. For blueberry muffins, the naive forecast is 33 units as sales have been stable. For cinnamon buns, the naive forecast is 35 units as sales have been trending upward. For cupcakes, the forecast is that sales will peak at day 16 at a similar level to previous peaks of 45, 48, and 47 units. 2. Sales data adequately reflects demand as no stockouts occurred. 3. The forecast for electrical contractor job requests in week 6 using different methods are: 22 units (naive), 20.75 units (4-period moving average), and 20.72 units (exponential smoothing with α=0.3).

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118 views4 pages

Chapter 3 Solutions

1. For blueberry muffins, the naive forecast is 33 units as sales have been stable. For cinnamon buns, the naive forecast is 35 units as sales have been trending upward. For cupcakes, the forecast is that sales will peak at day 16 at a similar level to previous peaks of 45, 48, and 47 units. 2. Sales data adequately reflects demand as no stockouts occurred. 3. The forecast for electrical contractor job requests in week 6 using different methods are: 22 units (naive), 20.75 units (4-period moving average), and 20.72 units (exponential smoothing with α=0.3).

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CHÍNH ĐÀO QUANG
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Problem 1:

A. Blueberry Muffins: The sales of muffins are stable during a 15-day


period (change around the average sales =33) => Stable Series Data => The
naïve forecast is the last value of day 15 is 33.
- Cinnamon Buns: In general, its sales follow an increasing trend and the
last change was 2 dozen (from 31 to 33) => Data with Trends => The naïve
forecast = 33+(33-31) =35.
- Cupcakes: The recorded sales of cupcakes reach the peak every 5 days.
(Day 1 = 45, Day 6 = 48, Day 11 = 47)
=> Seasonal Variations => The next peak would be in day 16.

B. The use of sales data instead of demand implies that sales adequately
reflect demand. We are assuming that no stock-outs occurred
because demand equals sales if there are no shortages.
Problem 2:

Sales
a.
20

0 F M A M J J A S
Month
b. 1)
t Y tY
1 19 19 From Table 3–1 with n = 7, t = 28, t2 = 140
2 18 36 n  tY   t  Y 7(542)  28(132)
b   .50
3 15 45 n  t 2  ( t ) 2 7(140)  28(28)
4 20 80
 Y  b  t 132  .50( 28)
5 18 90 a   16.86
n 7
6 22 132
7 20 140
132 542
For Sept., t = 8, and Yt = 16.86 + .50(8) = 20.86 (000)
15  20  18  22  20
2) MA 5   19
5
3) Month Forecast = F(old) + .20[Actual – F(old) ]
April 18.8 = 19 + .20[ 18 – 19 ]
May 18.04 = 18.8 + .20[ 15 – 18.8 ]
June 18.43 = 18.04 + .20[ 20 – 18.04 ]
July 18.34 = 18.43 + .20[ 18 – 18.43 ]
August 19.07 = 18.34 + .20[ 22 – 18.34 ]
September 19.26 = 19.07 + .20[ 20 – 19.07 ]
4) 20
5) .6 (20) + .3(22) + .1(18) = 20.4
c. Probably trend because the data appear to vary around an average of about 19
[18.86].
d. Sales are reflective of demand (i.e., no stockouts or backorders occurred).

Problem 3:
a.
Prepare a forecast for September.
+ Forecast usage in August (Ft): 88%
+ Actual usage in August (At): 89.6%
+ Smoothing constant (α): 0.1
Forecast for September (Ft+1) = Ft + α*(At – Ft)
88 + 0.1(89.6 – 88) = 88.16
b.
Assuming actual September usage of 92 percent, prepare a forecast for
October usage.
+ Forecast usage in September (Ft): 88.16%
+ Actual usage in September (At): 92%
+ Smoothing constant (α): 0.1
Forecast usage in October (Ft+1) = Ft + α*(At – Ft)
88.16 + 0.1(92 – 88.16) = 88.54%
Problem 4:

An electrical contractor’s records during the last five weeks indicate the number of job
requests:

WEEK 1 2 3 4 5
REQUESTS 20 22 18 21 22

Predict the number of requests for week 6 using each of these methods:
a. Naive.
b. A four-period moving average.
c. Exponential smoothing with .30. Use 20 for week 2 forecast

Solution:

a. Naive.
Stable time series data F(t) = A(t-1). Recent period is 5, and the number of requests for
period 6 is 22. Hence forecast for period 6 is 22.

b. A four-period moving average.


Moving average – A technique that averages a number of recent actual values, updated
as new values become available.

F6 =
The number of requests for period 6 is 20.75

c. Exponential smoothing with .30. Use 20 for week 2 forecast

The exponential smoothing forecast is found using the following equation

Forecast for week 3 = 20 + 0.30 x (22 - 20)= 20.6


Forecast for week 4 = 20.6 + 0.30 x (18 - 20.6) = 19.82
Forecast for week 5 = 19.82 + 0.30 x (21 - 19.82) = 20.174
Forecast for week 6 = 20.174 + 0.30 x (22 - 20.174) = 20.72

Number of requests

F3 20.6

F4 19.82

F5 20.174

F6 20.72

Problem 5:
F(t) = 80 + 15*t (bottles), where t = 0 corresponds to 1990
a. We have: F(t)’ = 15 > 0. So, the sales are increasing by 15 bottles annually.
b. With the equation given, the predicting annual sales for the year 2006 are:
t = 2006 - 1990 = 16
Finally: S2006 = F16 = 80 + 15*16 = 320 bottles.

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