A pharmacist has been monitoring sales of a certain over-the-counter pain reliever. Daily sales during the last 15 days were as follows:Day 1 2 3 4 5 6 7 8 9Number sold 36 38 42 44 48 49 50 49 52Day 10 11 12 13 14 15Number sold 48 52 55 54 56 57a. Which method would you suggest using to predict future sales—a linear trend equation or trend-adjusted exponential smoothing? Why? b. If you learn that on some days the store ran out of the specific pain reliever, would that knowledge cause you any concern? Explain c. Assume that the data refer to demand rather than sales. Using trend-adjusted smoothing with an initial forecast of 50 for day 8, an initial trend estimate of 2, and α = β = .3, develop forecasts for days 9 through 16. What is the MSE for the eight forecasts for which there are actual data?

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...
icon
Related questions
Question

A pharmacist has been monitoring sales of a certain over-the-counter pain reliever. Daily sales during the last 15 days were as follows:
Day 1 2 3 4 5 6 7 8 9
Number sold 36 38 42 44 48 49 50 49 52
Day 10 11 12 13 14 15
Number sold 48 52 55 54 56 57
a. Which method would you suggest using to predict future sales—a linear trend equation or trend-adjusted exponential smoothing? Why?

b. If you learn that on some days the store ran out of the specific pain reliever, would that knowledge cause you any concern? Explain

c. Assume that the data refer to demand rather than sales. Using trend-adjusted smoothing with an initial forecast of 50 for day 8, an initial trend estimate of 2, and α = β = .3, develop forecasts for days 9 through 16. What is the MSE for the eight forecasts for which there are actual data?

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Forecasting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.