![Operations and Supply Chain Management, 9th Edition WileyPLUS Registration Card + Loose-leaf Print Companion](https://www.bartleby.com/isbn_cover_images/9781119371618/9781119371618_largeCoverImage.gif)
Operations and Supply Chain Management, 9th Edition WileyPLUS Registration Card + Loose-leaf Print Companion
9th Edition
ISBN: 9781119371618
Author: Roberta S. Russell
Publisher: Wiley (WileyPLUS Products)
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 12, Problem 1P
The Hartley-Davis motorcycle dealer in the Minneapolis–St. Paul area wants to be able to
- a. Compute a three-month moving average forecast of demand for April through January (of the next year).
- b. Compute a five-month moving average forecast for June through January.
- c. Compare the two forecasts computed in parts (a) and (b) using MAD. Which one should the dealer use for January of the next year?
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
Here are the actual tabulated demands for an item for a nine-month period (January through September). Your supervisor wants to test two forecasting methods to see which method was better over this period.
MONTH
ACTUAL
January
120
February
145
March
146
April
171
May
154
June
182
July
138
August
135
September
146
a. Forecast April through September using a three-month moving average.
b. Use simple exponential smoothing with an alpha of 0.20 to estimate April through September, using the average of January through March as the initial forecast for April.
c-1. Calculate MAD for Three-month moving average and Exponential smoothing.
c-2. Use MAD to decide which method produced the better forecast over the six-month period.
a. Use a 3-month moving average to estimate the month-in-advance forecast of demand for months 4–12 and generate a forecast for the first month of next year. Calculate the average forecast error and mean absolute error.
b. Use a 3-month weighted moving average with weights of 0.6, 0.3, 0.1 (most recent to least recent, respectively) to calculate month-in-advance forecasts for months 4–12 and forecast for the first month of next year. Calculate the average forecast error and mean absolute error.
c. Compare the average forecast error and MAD for the forecasting methods in parts a and b. Based on these error calculations, which of the two forecast methods would you recommend? Why?
a) Forecast the demand for the week of October 12 using a 3-week moving average.
b) Use a 3-week weighted moving average, with weights of .1, .3, and .6, using .6 for the most recent week. Forecast demand for the week of October 12.
c) compute the forecast for the week of Oct 12 using exponential
smoothing with a forecast for august 31 of 360 and alpha 0.2
Chapter 12 Solutions
Operations and Supply Chain Management, 9th Edition WileyPLUS Registration Card + Loose-leaf Print Companion
Ch. 12 - List some of the operations and functions in a...Ch. 12 - What is the difference between quantitative...Ch. 12 - Describe the difference between short- and...Ch. 12 - Prob. 4QCh. 12 - Why is accurate forecasting so important to...Ch. 12 - Discuss the relationship between forecasting and...Ch. 12 - Prob. 7QCh. 12 - Describe the Delphi method for forecasting.Ch. 12 - What is the difference between a trend and a cycle...Ch. 12 - How is the moving average method similar to...
Ch. 12 - In the chapter examples for time series methods,...Ch. 12 - What effect on the exponential smoothing model...Ch. 12 - How does adjusted exponential smoothing differ...Ch. 12 - What determines the choice of the smoothing...Ch. 12 - How does the linear trend line forecasting model...Ch. 12 - Of the time series models presented in this...Ch. 12 - What advantages does adjusted exponential...Ch. 12 - Describe how a forecast is monitored to detect...Ch. 12 - Explain the relationship between the use of a...Ch. 12 - Selecting from MAD, MAPD, MSE, E, and E, which...Ch. 12 - What is the difference between linear and multiple...Ch. 12 - Define the different components (y, x, a, and b)...Ch. 12 - A company that produces video equipment, including...Ch. 12 - The Hartley-Davis motorcycle dealer in the...Ch. 12 - The manager of the I-85 Carpet Outlet needs to be...Ch. 12 - The LawnPlus Fertilizer Company distributes...Ch. 12 - Graph the demand data in Problem 12.3. Can you...Ch. 12 - The chairperson of the department of management at...Ch. 12 - The manager of the Excom Service Station wants to...Ch. 12 - The Intrepid mutual fund of growth stocks has had...Ch. 12 - The Oceanside Hotel is adjacent to City Coliseum,...Ch. 12 - Mary Hernandez has invested in a stock mutual fund...Ch. 12 - Globetron manufactures components for use in small...Ch. 12 - The Bee Line Caf is well known for its popular...Ch. 12 - For the demand data in Problem 12.11, develop a...Ch. 12 - Develop a seasonally adjusted forecast for the...Ch. 12 - Backstreets Pizza delivery service has randomly...Ch. 12 - The Willow River Mining Company mines and ships...Ch. 12 - The Great Northwest Outdoor Company is a catalog...Ch. 12 - Townside Food Vending operates vending machines in...Ch. 12 - The town aquatic center has an indoor pool that...Ch. 12 - Develop an adjusted exponential smoothing forecast...Ch. 12 - During the past five months the emergency room at...Ch. 12 - At its craft store and through its website, the...Ch. 12 - A group of business students at Tech organized a...Ch. 12 - Temco Industries has developed a forecasting model...Ch. 12 - Monitor the forecast in Problem 12.23 for bias...Ch. 12 - Develop a statistical control chart for the...Ch. 12 - Monitor the adjusted exponential smoothing...Ch. 12 - Develop an exponential smoothing forecast with =...
Additional Business Textbook Solutions
Find more solutions based on key concepts
• 4.3 Refer to Problem 4.2. Develop a forecast for years 2 through 12 using exponential smoothing with ? =.4 an...
Operations Management: Sustainability and Supply Chain Management (12th Edition)
Create an Excel spreadsheet on your own that can make combination forecasts for Problem 18. Create a combinatio...
Operations Management: Processes and Supply Chains (11th Edition)
What is precedent, and how does it affect common law?
Business in Action
The best fits using exponential smoothing, trend analysis, and linear regression for the given data. Introducti...
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
What are the three historical milestones in operations management? How have they influenced management?
Operations Management, Binder Ready Version: An Integrated Approach
Knowledge Booster
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
- Under what conditions might a firm use multiple forecasting methods?arrow_forwardThe file P13_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars) through credit unions. a. Use these data to forecast consumer revolving credit through credit unions for the next 12 months. Do it in two ways. First, fit an exponential trend to the series. Second, use Holts method with optimized smoothing constants. b. Which of these two methods appears to provide the best forecasts? Answer by comparing their MAPE values.arrow_forwardThe Baker Company wants to develop a budget to predict how overhead costs vary with activity levels. Management is trying to decide whether direct labor hours (DLH) or units produced is the better measure of activity for the firm. Monthly data for the preceding 24 months appear in the file P13_40.xlsx. Use regression analysis to determine which measure, DLH or Units (or both), should be used for the budget. How would the regression equation be used to obtain the budget for the firms overhead costs?arrow_forward
- The file P13_22.xlsx contains total monthly U.S. retail sales data. While holding out the final six months of observations for validation purposes, use the method of moving averages with a carefully chosen span to forecast U.S. retail sales in the next year. Comment on the performance of your model. What makes this time series more challenging to forecast?arrow_forwardThe owner of a restaurant in Bloomington, Indiana, has recorded sales data for the past 19 years. He has also recorded data on potentially relevant variables. The data are listed in the file P13_17.xlsx. a. Estimate a simple regression equation involving annual sales (the dependent variable) and the size of the population residing within 10 miles of the restaurant (the explanatory variable). Interpret R-square for this regression. b. Add another explanatory variableannual advertising expendituresto the regression equation in part a. Estimate and interpret this expanded equation. How does the R-square value for this multiple regression equation compare to that of the simple regression equation estimated in part a? Explain any difference between the two R-square values. How can you use the adjusted R-squares for a comparison of the two equations? c. Add one more explanatory variable to the multiple regression equation estimated in part b. In particular, estimate and interpret the coefficients of a multiple regression equation that includes the previous years advertising expenditure. How does the inclusion of this third explanatory variable affect the R-square, compared to the corresponding values for the equation of part b? Explain any changes in this value. What does the adjusted R-square for the new equation tell you?arrow_forwardThe file P13_29.xlsx contains monthly time series data for total U.S. retail sales of building materials (which includes retail sales of building materials, hardware and garden supply stores, and mobile home dealers). a. Is seasonality present in these data? If so, characterize the seasonality pattern. b. Use Winters method to forecast this series with smoothing constants = = 0.1 and = 0.3. Does the forecast series seem to track the seasonal pattern well? What are your forecasts for the next 12 months?arrow_forward
- Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?arrow_forwardScenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?arrow_forwardThe file P13_26.xlsx contains the monthly number of airline tickets sold by the CareFree Travel Agency. a. Create a time series chart of the data. Based on what you see, which of the exponential smoothing models do you think will provide the best forecasting model? Why? b. Use simple exponential smoothing to forecast these data, using a smoothing constant of 0.1. c. Repeat part b, but search for the smoothing constant that makes RMSE as small as possible. Does it make much of an improvement over the model in part b?arrow_forward
- The file P13_28.xlsx contains monthly retail sales of U.S. liquor stores. a. Is seasonality present in these data? If so, characterize the seasonality pattern. b. Use Winters method to forecast this series with smoothing constants = = 0.1 and = 0.3. Does the forecast series seem to track the seasonal pattern well? What are your forecasts for the next 12 months?arrow_forwarda) Apply moving average and exponential smoothing to generate two forecasts of the closing price for the entire data period. Set appropriate values for the forecast parameters (e.g., k and a). b) Plot and compare the actual and predicted data values you calculated in part (b). Provide one chart that displays actual, moving average, and exponential smoothing lines. Hint: Calculate MSE, MAD, or MAPE to compare the different forecasts. Develop your own forecast from scratch. Do NOT use Excel’s Data Analysis or Forecast Sheets.arrow_forwardJames and Maddie work for Statesboro Toolworks. Their boss Jenny tells them that she will promote the person who has the best possible forecast for the firm's DG5-S electric tool. Jenny emailed them the demand data from 10 days worth of sales and then asked each to create a forecast for the next 10 days. The table below shows (1) Actual Demand data (2nd Column), James forecast (3rd column), and Maddie's forecast (4th column). Calculate which of the two has the more accurate forecast. Who gets the promotion? The combatant's forecasts and the actual egg production are shown in the table. Which forecaster was more accurate and should be hired as a result of his performance on this trial? Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10 Forecast Forecast (James) (Maddie) 102 102 107 106 105 113 115 113 109 118 124 119 142 136 130 154 148 142 166 160 154 181 174 167 198 190 182 206 202 195 Actual Final solution: The person who gets the promotion will be: What is Maddie's MAPE?…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage LearningContemporary MarketingMarketingISBN:9780357033777Author:Louis E. Boone, David L. KurtzPublisher:Cengage Learning
- MarketingMarketingISBN:9780357033791Author:Pride, William MPublisher:South Western Educational Publishing
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
![Text book image](https://www.bartleby.com/isbn_cover_images/9781285869681/9781285869681_smallCoverImage.gif)
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
![Text book image](https://www.bartleby.com/isbn_cover_images/9780357033777/9780357033777_smallCoverImage.jpg)
Contemporary Marketing
Marketing
ISBN:9780357033777
Author:Louis E. Boone, David L. Kurtz
Publisher:Cengage Learning
Marketing
Marketing
ISBN:9780357033791
Author:Pride, William M
Publisher:South Western Educational Publishing
Forecasting 2: Forecasting Types & Qualitative methods; Author: Adapala Academy & IES GS for Exams;https://www.youtube.com/watch?v=npWni9K6Z_g;License: Standard YouTube License, CC-BY
Introduction to Forecasting - with Examples; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=98K7AG32qv8;License: Standard Youtube License