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378 views4 pages

Solution - 2

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Piya Nair
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Operations and Supply Chain Management 2024

Assignment 2 - FORECASTING

Instruction:
Please have 3 decimal accuracy while entering the answers.
Eg: 92 should be entered as 92.000

Given the data 91, 90, 96, 92, 96, 93, 98, 97,
1. find the forecast for the ninth period using a simple average (Range 94-95)
2. find the forecast for the ninth period using the weighted average (weight of 1 for
the first four periods and 2 for the remaining four), (Range 94-95)
3. find the forecast for the ninth period using a 3-period moving average? (Range
95.5 – 96.5)

Solutions for Qns 1,2,3:


1. Simple average = (91 + 90 + 96 + 92 + 96 + 93 + 98 + 97)/8 = 94.125
2. Weighted moving average = [1*(90+ 91 + 92 + 96) + 2*(96 + 93 + 98 + 97)]/12 =
94.75
3. Three period moving average = (93 + 98 + 97)/3 = 96

Given the data 90, 91, 92, 96, 93, 98, 97,
4. Find the forecast for the eighth period using simple exponential smoothing. (Use
α = 0.3 and initial forecast using simple average) (Range: 95.30 to 95.40)

Solutions for Qn 4:
Simple average = 93.85-93.86;
F1 = 93.85-93.86
F2 = 92.694 - 92.696
F3 = 92.182 – 92.184
F4 = 92.125 – 92.127
F5 = 93.283 – 93.285
F6 = 93.195 – 93.197
F7 = 94.633 – 94.635
F8 = 95.340 – 95.342

Given the data 61, 62, 66, 65, 69, 68, 71, 66
5. Find the forecast for the ninth period using a simple average. (Range: 65.95 to
66.05)
6. Find the forecast for the ninth period using 4 period moving average. (Range:
68.0 to 69.0)

Solutions for Qns 5,6:


5. Simple average = 66
6. Three period moving average forecast = (69 + 68 + 71 + 66)/4 = 68.5.

Given the data 60, 61, 63, 65, 67, 68, 70, 71
7. Find the forecast for the ninth period using simple exponential smoothing.
Use α = 0.2 and initial forecast using simple average. (Range: 66.5 to 67.5)

Solutions for Qn7:


F1 = average = 65.62 to 65.63,
F2 = 64.496 - 64.504,
F3 = 63.797 - 63.803,
F4 = 63.638 - 63.642,
F5 = 63.910 - 63.914,
F6 = 64.528 – 64.531,
F7 = 65.222 - 65.225,
F8 = 66.178 – 66.18,
F9 = 67.142 – 67.144 .

8. Given the data 60, 61, 63, 65, 67, 68, 70, 71 find the forecast for the ninth
period using linear regression. (Range: 73 to 74)

Solution for Qn 8:
We compute ΣY = 525, Σt = 36, Σt2 = 204 and ΣYt = 2432.
The equations are 525 = 8a + 36b and 2432 = 36a + 204b.
Solving, we get
b = 1.655 and
a = 58.177.
F9 = a + 8b = 71.417

Given the data 63, 64, 66, 67, 67, 68, 71, 72. Use Holt’s model. Use α = β = 0.2.
9. The initial slope is ------- (Range: 1.28 to 1.29)
10. The forecast for the ninth period is --------- (Range 72.05 to 73.95)

Solutions for Qns 9,10:


9. Slope = (72-63)/7 = 1.286
10. The equations for Holt’s model have been given in the lectures. Using these
equations, we get
F2 = 64.20-64.30
F3 = 65.40-65.60
F4 = 66.85-66.95
F5 = 68.15-68.30
F6 = 69.20-69.30
F7 = 70.20-70.30
F8 = 71.30-71.50
F9 = 72.25-73.40

Data for four quarters for three years is 80, 63, 70, 60; 85, 67, 73, 65; 90, 71, 76, 70.
Use simple seasonality model to find the forecast for the next four periods. (Hint:
Use linear regression to fit the final model).

11. The total forecasted demand is


a) 300
b) 324
c) 338
Ans: (b)

12. The forecasted values are close to


a) (93.96, 74.52, 81, 74.52)
b) (87, 69, 75, 69)
c) (98.02, 77.74, 84.5, 77.74)
Ans: (a)

Solutions for Qns 11, 12


We assume that there are 4 seasons and data for three years (say). The total
demands for 3 years are 273, 290 and 307.
Through linear regression, we get a model 256+17t. The forecasted total demand is
324.
The approximate seasonality indices (average) are 0.29, 0.23, 0.25 and 0.23.
The forecasted values are 93.96, 74.52, 81, 74.52

13. Students believe that the salary they can expect during a placement process
is related to their academic performance. The CGPA (indicator of
performance) and the salary obtained by six students are (7, 6), (6.8, 5.8),
(7.5, 6.5), (8, 7), (8.2, 7.5) and (8.6, 8). Find the salary that a student with
CGPA 8.7 can expect? (Range: 8.01 to 8.05)

Solution for Qn.13


We build a causal model of the form Y = a + bX where Y is the salary and X is the
CGPA. The equations are ΣY = na + bΣX; ΣXY = aΣX + bΣX2. Computing, we get
ΣX = 46.1,
ΣY = 40.8,
ΣXY = 316.49
ΣX2 = 356.69
Solving, we get a = -2.48—2.49 and b = 1.20-1.22
For X = 8.7, Y = 8.02-8.04.

14. Given the data 92, 93, 92, 91, 93 find the forecast for the sixth period using a
simple average. Compute the mean absolute deviation? (0.64)

Solution for Qn.14


F6 = 92.2. Mean absolute deviation = MAD = (∑𝑛 |𝐷𝑖 − 𝐹𝑖 |)/n

Computing, we get MAD = (0.2+0.8+0.2+1.2+0.8)/5 = 0.64


15. Given the data 92, 93, 92, 91, 93 find the forecast for the sixth period using
simple exponential smoothing? Use α = 0.4 and initial forecast using simple
average. (Range: 91 to 93)
Solutions for Qn.15
F1 = 92.2; F2 = 92.12; F3 = 92.472; F4 = 92.283; F5 = 91.77; F5 =92.262

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