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4.4 A check-processing center uses exponential smooth- ing to forecast the number of incoming checks each month. The number of checks received in June was 40 million, while the fore- cast was 42 million. A smoothing constant of .2 is used. a) What is the forecast for July? b) If the center received 45 million checks in July, what would be the forecast for August? c) Why might this be an inappropriate forecasting method for this situation? Px

4.4 A check-processing center uses exponential smooth- ing to forecast the number of incoming checks each month. The number of checks received in June was 40 million, while the fore- cast was 42 million. A smoothing constant of .2 is used. a) What is the forecast for July? b) If the center received 45 million checks in July, what would be the forecast for August? c) Why might this be an inappropriate forecasting method for this situation? Px

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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4.4 A check-processing center uses exponential smooth- ing to forecast the number of incoming checks each month. The number of checks received in June was 40 million, while the fore- cast was 42 million. A smoothing constant of .2 is used. a) What is the forecast for July? b) If the center received 45 million checks in July, what would be the forecast for August? c) Why might this be an inappropriate forecasting method for this situation? Px .. 4.5 The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the antici- pated mileage to be driven next year. The miles driven during the past 5 years are as follows: YEAR 1 2 3 4 5 a) Forecast the mileage for next year (6th year) using a 2-year moving average. b) Find the MAD based on the 2-year moving average. (Hint: You will have only 3 years of matched data.) c) Use a weighted 2-year moving average with weights of 4 and .6 to forecast next year's mileage. (The weight of .6 is for the most recent year.) What MAD results from using this approach to forecasting? (Hint: You will have only 3 years of matched data.) MILEAGE 3,000 4,000 3,400 3,800 3,700 d) Compute the forecast for year 6 using exponential smoothing, an initial forecast for year 1 of 3,000 miles, and a 5. Px 4.6 The monthly sales for Yazici Batteries, Inc., were as follows: MONTH January February March April May June July August September October November December SALES 20 21 15 14 13 16 17 18 20 20 21 23 E lo C P d C 0 0 a b C . W a b C d e . C W
Transcribed Image Text:4.4 A check-processing center uses exponential smooth- ing to forecast the number of incoming checks each month. The number of checks received in June was 40 million, while the fore- cast was 42 million. A smoothing constant of .2 is used. a) What is the forecast for July? b) If the center received 45 million checks in July, what would be the forecast for August? c) Why might this be an inappropriate forecasting method for this situation? Px .. 4.5 The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the antici- pated mileage to be driven next year. The miles driven during the past 5 years are as follows: YEAR 1 2 3 4 5 a) Forecast the mileage for next year (6th year) using a 2-year moving average. b) Find the MAD based on the 2-year moving average. (Hint: You will have only 3 years of matched data.) c) Use a weighted 2-year moving average with weights of 4 and .6 to forecast next year's mileage. (The weight of .6 is for the most recent year.) What MAD results from using this approach to forecasting? (Hint: You will have only 3 years of matched data.) MILEAGE 3,000 4,000 3,400 3,800 3,700 d) Compute the forecast for year 6 using exponential smoothing, an initial forecast for year 1 of 3,000 miles, and a 5. Px 4.6 The monthly sales for Yazici Batteries, Inc., were as follows: MONTH January February March April May June July August September October November December SALES 20 21 15 14 13 16 17 18 20 20 21 23 E lo C P d C 0 0 a b C . W a b C d e . C W
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 a = .3 and a September forecast of 18. v) A trend projection. c) With the data given, which method would allow you to fore- cast next March's sales? P .. 4.7 The actual demand for the patients at Omaha Emergency Medical Clinic for the first 6 weeks of this year fol- lows: WEEK 1 2 3 4 5 6 Clinic administrator Marc Schniederjans wants you to forecast patient demand at the clinic for week 7 by using this data. You decide to use a weighted moving average method to find this fore- cast. Your method uses four actual demand levels, with weights of 0.333 on the present period, 0.25 one period ago, 0.25 two peri- ods ago, and 0.167 three periods ago. a) What is the value of your forecast? Px b) If instead the weights were 20, 15, 15, and 10, respectively, how would the forecast change? Explain why. c) What if the weights were 0.40, 0.30, 0.20, and 0.10, respec- tively? Now what is the forecast for week 7? . 4.8 Daily high temperatures in St. Louis for the last week were as follows: 93, 94, 93, 95, 96, 88, 90 (yesterday). a) Forecast the high temperature today, using a 3-day moving average. b) Forecast the high temperature today, using a 2-day moving average. c) Calculate the mean absolute deviation based on a 2-day mov- ing average. d) Compute the mean squared error for the 2-day moving average. e) Calculate the mean absolute percent error for the 2-day mov- ing average. P ACTUAL NO. OF PATIENTS 65 62 70 48 63 52 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 January February March April May June PRICE PER CHIP $1.801 July 1.67 1.70 1.85 1.90 1.87 MONTH August September October November December PRICE PER CHIP 1.80 1.83 1.70 1.65 1.70 1.75
Transcribed Image Text: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 a = .3 and a September forecast of 18. v) A trend projection. c) With the data given, which method would allow you to fore- cast next March's sales? P .. 4.7 The actual demand for the patients at Omaha Emergency Medical Clinic for the first 6 weeks of this year fol- lows: WEEK 1 2 3 4 5 6 Clinic administrator Marc Schniederjans wants you to forecast patient demand at the clinic for week 7 by using this data. You decide to use a weighted moving average method to find this fore- cast. Your method uses four actual demand levels, with weights of 0.333 on the present period, 0.25 one period ago, 0.25 two peri- ods ago, and 0.167 three periods ago. a) What is the value of your forecast? Px b) If instead the weights were 20, 15, 15, and 10, respectively, how would the forecast change? Explain why. c) What if the weights were 0.40, 0.30, 0.20, and 0.10, respec- tively? Now what is the forecast for week 7? . 4.8 Daily high temperatures in St. Louis for the last week were as follows: 93, 94, 93, 95, 96, 88, 90 (yesterday). a) Forecast the high temperature today, using a 3-day moving average. b) Forecast the high temperature today, using a 2-day moving average. c) Calculate the mean absolute deviation based on a 2-day mov- ing average. d) Compute the mean squared error for the 2-day moving average. e) Calculate the mean absolute percent error for the 2-day mov- ing average. P ACTUAL NO. OF PATIENTS 65 62 70 48 63 52 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 January February March April May June PRICE PER CHIP $1.801 July 1.67 1.70 1.85 1.90 1.87 MONTH August September October November December PRICE PER CHIP 1.80 1.83 1.70 1.65 1.70 1.75
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