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# BUAD 311 HW #5 - BUAD 311 Operations Management Homework 5...

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BUAD 311 Operations Management Homework 5: Forecasting 1 . a) α = 2/(N+1) = 2/(365+1) = 0.00546 b) 1/ α = (N+1)/2 1/0.15384615 = (N+1)/2 13 = N + 1 N = 12 The time units would be in months as it is easier to calculate. 2. a) F July = 0.6(15) + 0.3(16) + 0.1(12) = 15 b) F July = (15 + 16 + 12) / 3 = 14.33 c) F July = 0.2(15) + (1-0.2)13 = 13.4 3. a) F 10 = (1210 + 1270 + 1335 + 1425)/4 = 1310 b) F 10 = (1239 + 1295 + 1309 + 1347)/4 = 1297.5 c) Red Socks 4 week MA Absolute Deviation 1 1000 2 1013 3 1078 4 1082 5 1140 1043.25 96.75 6 1239 1078.25 160.75 7 1295 1134.75 160.25 8 1309 1189 120 9 1347 1245.75 101.25 10 Forecast: 1297.5 MAD: 127.80 MAD = (96.75 + 160.75 + 160.25 + 120 + 101.25)/5 = 127.8

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MAD = (127.75 + 75.25 + 98.5 + 123.75 + 168.75)/5 = 118.8 d) P(N(1310, 1.25*118.8) > Amt stocked) = 0.1 P( Z > (Amt stocked – 1310)/148.5) = 0.1 (Amt stocked – 1310)/148.5) = 1.285 Amt stocked = 1500.8225 e) P(N(1297.5, 1.25*127.8) > Amt stocked) = 0.1 P( Z > (Amt stocked – 1297.5)/159.75) = 0.1 (Amt stocked – 1297.5)/159.75) = 1.285 Amt stocked = 1502.78 f) Red Socks Gold Socks White Socks Forecast AD 1000 1000 2000     1013 1063 2076     1078 1111 2189     1082 1155 2237     1140 1210 2350 2125.5 224.5 1239 1210 2449 2213 236 1295 1270 2565 2306.25 258.75 1309 1335 2644 2400.25 243.75 1347 1425 2772 2502 270 2607.5   MAD:  246.6 Amount to stock = 1.285 * 1.25 * 246.6 + 2607.5 = 3003.60125 The sum of red and gold socks is 3003.6025which is more than the forecast if white

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