2/21/2016Collection – MBA675T303 Operations & Logistics in the (...…1/22CollectionUsers can Collect posts into a printable, sortable format. Collections are a good way to organizeposts for quick reading. A Collection must be created to tag posts.More HelpThread:Chris Holder Q8Post:Chris Holder Q8Author:Posted Date:January 21, 2016 11:01 AMStatus:Published(Post is Read)8.Compare and contrast the following forecasting methods:moving average, weightedmoving average, and exponential smoothing.Illustrate a calculation for each one.Moving Average –In a data series a three day moving average is the mean ofthe past three days of data. The number of drive through customers on Monday,Tuesday, and Wednesday was 130, 140, and 150 respectively; Thursday's 3 daymoving average is 140 customers. Friday when the totals for Thursday aretallied and found to be 160 the past three days (tue, wed, thr) are averaged andfound to be 150 customersWeighted moving average –is very similar to a moving average but insteadof a mean each week would be multiplied by a weight and then added together.Its important that the “weight” doesn't tally up past 100%. For example, themost recent day could be multiplied by 50%, the middle day multiplied by 30%and the last day multiplied by 20%. For our numbers the weighted movingaverage for Thursday would be 143 [(150 x .5) + (140 x .3) + (130 x .2)]. Fridaythe total would be 153 [(160 x .5) + (150 x .3) + (140 x .2)].Exponential Smoothing –Is similar to the weighted moving average but theadvantage is that only the last periods forecast, last periods actual demand, anda smoothing factor of under 100% are needed. You don't need a complete set ofperiods to begin calculating the forecast.If yesterday I predicted 100 chickens would hatch and actually only 80 hatchedand my smoothing factor is 80% we can figure out the current periods forecast.Today's forecast is yesterday's demand multiplied by the smoothing factor plusyesterday's forecast multiplied by one minus the smoothing factor.Its much easier than it sounds; remember the smoothing factor and one minusthe smoothing factor must equal 100%. If 80% (or 0.80) is our smoothing factorthan 20% (or .20) is 1 minus the smoothing factor. 80% plus 20% equals 100%.We will need to simply take 80% of yesterday's demand and add it to 20% ofyesterdays' forecast to get today's forecast. (80% x 80) + (20% x 100) = 84chickens. Once I have today's actual demand I can get tomorrow's forecast byadding 80% of today's demand and 20% of today's forecast.
Christopher HolderThread:Chris Holder Q8Post:RE: Chris Holder Q8Author:Posted Date:January 27, 2016 4:19 PMStatus:PublishedHi Chris,William Dempsey