Week Sales 3 WMA 4 WMA 1 40 W1 0.5 2 45 W2 0.3 3 41 W3 0.2 4 46 41.7 5 39 44 29.3 6 44 42.1 31 W1 0.3 7 40 43.5 29.1 W2 0.2 8 45 40.7 30.2 W3 0.2 9 33 43 19 W4 0.3 10 41 40.1 30.3 Week Sales 3 WMA ABS ERROR 4 WMA ABS ERROR 1 40 W1 0.5 2 45 W2 0.3 3 41 W3 0.2 4 46 41.7 4.3 5 39 44 5 43 4 6 44 42.1 1.9 42.6 1.4 W1 0.3 7 40 43.5 3.5 42.5 2.5 W2 0.2 8 45 40.7 4.3 42.4 2.6 W3 0.2 9 33 43 10 42 9 W4 0.3 10 41 40.1 0.9 40.1 0.9 MAD 4.271428571 3.4 A four-week weighted moving average forecast is more appropriate than a three-week weighted moving average forecast since the MAD is lower. From the tables above: (a) Explain how Mr. Ferdinand can easily predict the future demand. (b) Explain how Mr. Ferdinand can reduce overall cost, increase customer satisfaction and mitigate business risks.
Week Sales 3 WMA 4 WMA 1 40 W1 0.5 2 45 W2 0.3 3 41 W3 0.2 4 46 41.7 5 39 44 29.3 6 44 42.1 31 W1 0.3 7 40 43.5 29.1 W2 0.2 8 45 40.7 30.2 W3 0.2 9 33 43 19 W4 0.3 10 41 40.1 30.3 Week Sales 3 WMA ABS ERROR 4 WMA ABS ERROR 1 40 W1 0.5 2 45 W2 0.3 3 41 W3 0.2 4 46 41.7 4.3 5 39 44 5 43 4 6 44 42.1 1.9 42.6 1.4 W1 0.3 7 40 43.5 3.5 42.5 2.5 W2 0.2 8 45 40.7 4.3 42.4 2.6 W3 0.2 9 33 43 10 42 9 W4 0.3 10 41 40.1 0.9 40.1 0.9 MAD 4.271428571 3.4 A four-week weighted moving average forecast is more appropriate than a three-week weighted moving average forecast since the MAD is lower. From the tables above: (a) Explain how Mr. Ferdinand can easily predict the future demand. (b) Explain how Mr. Ferdinand can reduce overall cost, increase customer satisfaction and mitigate business risks.
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...
Related questions
Question
|
Week |
Sales |
3 WMA |
4 WMA |
|
|
|
1 |
40 |
|
|
W1 |
0.5 |
|
2 |
45 |
|
|
W2 |
0.3 |
|
3 |
41 |
|
|
W3 |
0.2 |
|
4 |
46 |
41.7 |
|
|
|
|
5 |
39 |
44 |
29.3 |
|
|
|
6 |
44 |
42.1 |
31 |
W1 |
0.3 |
|
7 |
40 |
43.5 |
29.1 |
W2 |
0.2 |
|
8 |
45 |
40.7 |
30.2 |
W3 |
0.2 |
|
9 |
33 |
43 |
19 |
W4 |
0.3 |
|
10 |
41 |
40.1 |
30.3 |
|
|
|
Week |
Sales |
3 WMA |
ABS ERROR |
4 WMA |
ABS ERROR |
|
|
|
1 |
40 |
|
|
|
|
W1 |
0.5 |
|
2 |
45 |
|
|
|
|
W2 |
0.3 |
|
3 |
41 |
|
|
|
|
W3 |
0.2 |
|
4 |
46 |
41.7 |
4.3 |
|
|
|
|
|
5 |
39 |
44 |
5 |
43 |
4 |
|
|
|
6 |
44 |
42.1 |
1.9 |
42.6 |
1.4 |
W1 |
0.3 |
|
7 |
40 |
43.5 |
3.5 |
42.5 |
2.5 |
W2 |
0.2 |
|
8 |
45 |
40.7 |
4.3 |
42.4 |
2.6 |
W3 |
0.2 |
|
9 |
33 |
43 |
10 |
42 |
9 |
W4 |
0.3 |
|
10 |
41 |
40.1 |
0.9 |
40.1 |
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
MAD |
4.271428571 |
|
|
3.4 |
|
|
A four-week weighted moving average
From the tables above:
(a) Explain how Mr. Ferdinand can easily predict the future demand.
(b) Explain how Mr. Ferdinand can reduce overall cost, increase customer satisfaction and mitigate business risks.
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