Operations and Supply Chain Management 9th edition
9th Edition
ISBN: 9781119320975
Author: Roberta S. Russell, Bernard W. Taylor III
Publisher: WILEY
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Textbook Question
Chapter 4, Problem 12P
You have won two tickets to a Lady Gaga concert in Atlantic City. The concert is three days from now and you have to make travel arrangements. Calculate the reliability of each of the following options:
- a. Take the bus from campus to Washington, DC, and from DC to Atlantic City. The bus from campus to DC has a reliability of 90%, and from DC to Atlantic City has a reliability of 93%.
- b. Fly directly from the local airport to Atlantic City. The chance that the flight will leave on time and thus arrive in time for the concert is 90%, but there is also a 50% chance that you will be able to beg or borrow enough money to pay for the flight.
- c. Drive to Atlantic City. Your car has a 70% chance of making the entire trip without breaking down. Although not recommended, if your car breaks down, you could hitchhike with a 40% chance of getting to Atlantic City unscathed and in time for the concert.
- d. Drive to Washington, DC, and take the bus to Atlantic City from there. Your car has a 79% chance of making it to DC. If it doesn’t make it to DC, you can hitchhike there with a 40% chance of success.
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Approach
Consider the previous month's forecast to identify which technique is most effective. Use that to forecast the next
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Remember to select the forecasting technique that produces the forecast error nearest to zero. For example:
a. Naïve Forecast is 230 and the Forecast Error is -15.
b. 3-Month Moving Forecast is 290 and the Forecast Error is -75.
c. Exponential Smoothing Forecast for .2 is 308 and the Forecast Error is -93.
d. Exponential Smoothing Forecast for .5 is 279 and the Forecast Error is -64.
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Naïve
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Moving
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You have been given a task to create a demand forecast for the second year of sales of a premium outdoor grill.
Accurate forecasts are important for many reasons, including for the company to ensure they have the materials
they need to create the products required in a certain period of time. Your objective is to minimize the forecast
error, which will be measured using the Mean Absolute Percentage Error (MAPE) with a goal of being below 25%.
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five different forecasting techniques (Naïve, 3-Month Moving Average, Exponential Smoothing for .2, Exponential
Smooth for .5, and Seasonal) to help determine the best forecast for that particular month. Based on the given
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Consider the previous month's forecast to identify which technique is most effective. Use that to forecast the next…
Chapter 4 Solutions
Operations and Supply Chain Management 9th edition
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