Operations Management
11th Edition
ISBN: 9780132921145
Author: Jay Heizer
Publisher: PEARSON
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Textbook Question
Chapter 4, Problem 4P
A check-processing center uses exponential smoothing to forecast the number of incoming checks each month. The number of checks received in June was 40 million, while the forecast was 42 million. A smoothing constant of .2 is used.
- a. What is the forecast for July?
- b. If the center received 45 million checks in July, what would be the forecast for August?
- c. Why might this be an inappropriate
forecasting method for this situation?
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A check-processing center uses exponential smooth- ing to forecast the number of incoming checks each month. The number of checks received in June was 40 million, while the fore- cast was 42 million. A smoothing constant of .2 is used.
a) What is the forecast for July?b) If the center received 45 million checks in July, what would be
the forecast for August?c) Why might this be an inappropriate forecasting method for the situation
A check-processing center uses exponential smoothing to forecast the number of incoming checks each month. The number of checks received in June was 40 million, while the forecast was 42 million. A smoothing constant of .2 is used. a) What is the forecast for July? b) If the center received 45 million checks in July, what would be the forecast for August? c) Why might this be an inappropriate forecasting method for this situation?
a) 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.
Chapter 4 Solutions
Operations Management
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