Homework
Complete the following problems from Chapter 4 in your textbook. The Homework Problems grading rubric is posted in Doc Sharing—refer to the Homework Problems Rubric document.
Chapter 4 Problems
Problem 4.2 a, b, and c
Problem 4.6 a, b, and c
Problem 4.9 a, b, c, and d
- a)Plot the above data on a graph. Do you observe any trend, cycles, or random variations?
- b)Starting in year 4 and going to year 12, forecast demand using a 3-year moving average. Plot your forecast on the same graph as the original data.
- c)Starting in year 4 and going to year 12, forecast demand using a 3-year moving average with weights of .1, .3, and .6, using .6 for the most recent year. Plot this forecast on the same graph.
- d)As you compare forecasts with the original data, which seems to give the better results?
• 4.6
The monthly sales for Yazici Batteries, Inc., were as follows:
MONTH |
SALES |
January |
20 |
February |
21 |
March |
15 |
April |
14 |
May |
13 |
June |
16 |
July |
17 |
August |
18 |
September |
20 |
October |
20 |
November |
21 |
December |
23 |
- a)Plot the monthly sales data.
- b)Forecast January sales using each of the following:
- i)Naive method.
- ii)A 3-month moving average.
- iii)A 6-month weighted average using .1, .1, .1, .2, .2, and .3, with the heaviest weights applied to the most recent months.
- iv)Exponential smoothing using an α = .3 and a September forecast of 18.
- v)A trend projection.
- c)With the data given, which method would allow you to forecast next March’s sales?
•• 4.9
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:
MONTH |
PRICE PERCHIP |
MONTH |
PRICE PERCHIP |
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 |
- 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 α = .1, then α = .3, and finally α = .5. Using MAD, which a is the best?