ISE 312-Koon-HW 3

# ISE 312-Koon-HW 3 - ISE 312 Homework#3 Production and...

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ISE 312 Production and Inventory Control Spring_2007 Homework #3 1. Quarterly data for the failures of aircraft engines at a military base during the last two years are: 200, 250, 175, 186, 225, 285, 305, 190. Forecast engines failures for the eight quarters using first-order and second- order exponential smoothing methods. Assume the forecast for period one was 200 and a smoothing constant of 0.10. Plot the observed number of failures and both exponential smoothing forecasts on the same graph. Compare and contrast results. Also, calculate forecasts when the smoothing constant is 0.20. Compare and contrast exponential smoothing when α is small and large. First Order Exponential Smoothing: F NEW = α x Failures + (1- α ) x F OLD Qtr Forecast (Old) Failures Forecast (New) 1 200 200 200 (.10)(200) + (.9)(200) 2 200 250 205 (.10)(250) + (.9)(200) 3 205 175 202 (.10)(175) + (.9)(205) 4 202 186 200 (.10)(186) + (.9)(202) 5 200 225 203 (.10)(225) + (.9)(200) 6 203 285 211 (.10)(285) + (.9)(203) 7 211 305 220 (.10)(305) + (.9)(211) 8 220 190 217 (.10)(190) + (.9)(220) Second Order Exponential Smoothing: F NEW = (2)A NEW +B NEW A NEW = F OLD + α (Failures – F OLD ) B NEW = B OLD + α (A NEW – B OLD ) Qtr F (Old) Failures A NEW B OLD

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ISE 312-Koon-HW 3 - ISE 312 Homework#3 Production and...

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