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Juicy-Juice Ltd. wants to predict their sales for the fiscal year 2021, and the financial team was provided with the following table with actual sales value in thousands of dollars for the first half of the year: Actual Sales Month (S, 000) January 128 February 112

Juicy-Juice Ltd. wants to predict their sales for the fiscal year 2021, and the financial team was provided with the following table with actual sales value in thousands of dollars for the first half of the year: Actual Sales Month (S, 000) January 128 February 112

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Need assistance with question 2 iv, v. I already got help with i, ii, iii

B. Juicy-Juice Ltd. is planning to increase its juice supply for the fiscal year 2021 – 2022. With the expected increase in demand, it is projected that there is a need for additional space. Management must decide whether to rent a large building or construct a medium factory space. If they rent a large building and the demand is low, the net present value after deducting for building costs will be $230,000. If the demand is high, the company can continue using the old factory or rent an additional building to meet the current need. Renting an additional building would have a net present value of $301,000 and using the old factory would have a net present value of $530,000. The probability of high demand is 0.45 while the probability of low demand is 0.55. If a medium factory was constructed and the demand is high, the estimated net present value is $320, 000. If the demand is moderate, the net present value is $195, 000. If the demand turns out to be low, the net present value will be (300,000). The probability that the demand will be high, moderate, or low is estimated to be 0.50, 0.25 and 0.25, respectively. (i) Draw the decision tree to represent the above information. (ii) Calculate the expected values of each course of action. (iii) Using the result from (ii) decide which course of action the Juicy-Juice management team should take. Question 2 Juicy-Juice Ltd. wants to predict their sales for the fiscal year 2021, and the financial team was provided with the following table with actual sales value in thousands of dollars for the first half of the year: Actual Sales Month ($, 000) January February 128 112 March 186 April May 218 142 June 135 Writing all answers to the nearest whole number: (i) Compute a three – month simple moving average forecast for the monthly sales from April to July 2021. (ii) If the actual sales value for July is $159,000, what is the percentage error in the forecast? (iii) Compute a three- month weighted moving average forecast for the monthly sales from April to July 2021, using the weights: w, =0.55 , w, = 0.30 , w, =0.15 (iv) Compute the exponential smoothing forecast from February to August using a = 0.4 and an initial forecast for January $130,000. (v) Calculate the Mean Absolute Deviation (MAD) for each forecasting method. 5
Transcribed Image Text:B. Juicy-Juice Ltd. is planning to increase its juice supply for the fiscal year 2021 – 2022. With the expected increase in demand, it is projected that there is a need for additional space. Management must decide whether to rent a large building or construct a medium factory space. If they rent a large building and the demand is low, the net present value after deducting for building costs will be $230,000. If the demand is high, the company can continue using the old factory or rent an additional building to meet the current need. Renting an additional building would have a net present value of $301,000 and using the old factory would have a net present value of $530,000. The probability of high demand is 0.45 while the probability of low demand is 0.55. If a medium factory was constructed and the demand is high, the estimated net present value is $320, 000. If the demand is moderate, the net present value is $195, 000. If the demand turns out to be low, the net present value will be (300,000). The probability that the demand will be high, moderate, or low is estimated to be 0.50, 0.25 and 0.25, respectively. (i) Draw the decision tree to represent the above information. (ii) Calculate the expected values of each course of action. (iii) Using the result from (ii) decide which course of action the Juicy-Juice management team should take. Question 2 Juicy-Juice Ltd. wants to predict their sales for the fiscal year 2021, and the financial team was provided with the following table with actual sales value in thousands of dollars for the first half of the year: Actual Sales Month ($, 000) January February 128 112 March 186 April May 218 142 June 135 Writing all answers to the nearest whole number: (i) Compute a three – month simple moving average forecast for the monthly sales from April to July 2021. (ii) If the actual sales value for July is $159,000, what is the percentage error in the forecast? (iii) Compute a three- month weighted moving average forecast for the monthly sales from April to July 2021, using the weights: w, =0.55 , w, = 0.30 , w, =0.15 (iv) Compute the exponential smoothing forecast from February to August using a = 0.4 and an initial forecast for January $130,000. (v) Calculate the Mean Absolute Deviation (MAD) for each forecasting method. 5
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