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Homework #1 Demand Forecast

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51 views3 pages

Homework #1 Demand Forecast

Uploaded by

alex.rosas0203
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Production Systems I

First Period
“Demand Forecast”

Instructions: Solve the next problems, using in each one of them the
cash flow diagram, circle the correct answer in each problem.

1. Using the following historical data, apply a quarterly moving average to


forecast the demand to the third quarter of this year. Note that the first quarter
comprises January, February and March; the second trimester, April, May and
June; the third quarter, July, August and September; and the fourth quarter,
October, November and December.(10 points)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Last Year 100 125 135 175 185 200 150 140 130 200 225 250
This Year 125 135 135 190 200 190

2. Here is the data for the last 21 months of actual sales for a particular product:
Month Last Year This Year Month Last Year This Year
January 300 275 July 400 350
February 400 375 August 300 275
March 425 350 September 375 350
April 450 425 October 500
May 400 400 November 550
June 460 350 December 500

Develop a forecast for the fourth quarter using a currency-weighted moving


average third trimester. Weight most recent quarter as 0.5, second most
recent as 0.25 and the third as 0.25. Solve the problem using quarters, as
opposed to forecasting each month. (15 points)

3. The next table contains the demand of the past 10 months


Month Demand Month Demand
1 31 6 36
2 34 7 38
3 33 8 40
4 35 9 40
5 37 10 41

a) Calculate the exponential smoothing of this data with 𝛂=0.30 y initial


forecast of (F1)= 31.
b) Calculate the exponential smoothing with trend of this data with
𝛂=0.30, δ= 0.30, an initial trend forecast of (T1)= 1 and an initial
smooth forecast of (F1)= 30 (15 points)

4. Assume that your inventory of merchandise for sale is maintained on a


demand basis forecast. If the distributor's sales staff calls on the first day of
each month, calculate your sales forecast with the three methods requested
here.

Month Demand
June 140
July 180
August 170

a) With a Simple moving average of three months, What will be the


forecast for September?
b) With a Weighted moving average, What will be the forecast for
September with weight values of 020, 0.30 and 0.50 for June, July and
August?
c) Using simple exponential smoothing, and assuming that the June
forecast was 130, forecast September sales with a smoothing alpha
constant of 0.30. (20 points)

5. Zeus Computer Chips, Inc., had major contracts to produce microprocessors


of the type Centrino. The market declined the previous three years due to
dual-core microprocessors that Zeus does not produce, so he has the painful
task of forecasting the coming year. The labor is unpleasant because the
company has failed to find substitutes for its product lines. Here is the
demand for the past 12 quarters
Two Years Ago Demand One year Ago Demand This Year Demand
I 4800 I 3500 I 3200
II 3500 II 2700 II 2100
III 4300 III 3500 III 2700
IV 3000 IV 2400 IV 1700
With the decomposition method forecast the demand for the next four
quarters. (10 points)

6. Your manager is trying to determine which forecasting method to use. From


the following historical data, calculate the forecast and specify which
procedure you would use.

Month Demand Month Demand


1 62 7 76
2 65 8 78
3 67 9 78
4 68 10 80
5 71 11 84
6 73 12 85

a) Calculate forecast with a simple moving average of three months for


periods 4 to 12.
b) Calculate forecast with a weighted moving average of three months
with weighted values of 0.50,0.30, 0.20 for periods from 4-12.
c) Calculate the simple exponential smoothing forecast for periods 2
through 12 with an initial forecast (F1) of 61 and an α of 0.30.
d) Calculate the exponential smoothing forecast with trend component for
periods 2 through 12 with an initial trend forecast (T1) of 1.8, a
smoothing forecast initial exponential (F1) of 60, an α of 0.30 and a δ of
0.30. (20 points)

7. Tucson Machinery, Inc., manufactures numerically controlled machines that


are sold at a price average of 0.5 million dollars each. The sales of these
machines during the two years above are

Last Year This Year


Quarter Demand Quarter Demand
I 12 I 16
II 18 II 24
III 26 III 28
IV 16 IV 18

a) Find the line equation with linear regression method.


b) Find the trend and the seasonal factor. (10 points)

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