final-review-COMM-204-2016W1-solution.pdf - COMM 204 FINAL REVIEW SESSION BY CINDY LI T ABLE OF C ONTENT Forecasting II Inventory Management III More on

final-review-COMM-204-2016W1-solution.pdf - COMM 204 FINAL...

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COMM 204 F INAL R EVIEW S ESSION B Y : CINDY L I
T ABLE OF C ONTENT I. Forecasting II. Inventory Management III. More on Inventory Management IV. Project Management V. Newsvendor Problem
I. Forecasting 1. 2(42) + 3(47) + 4(43) = 397; 397/ (2+3+4) = 44.1 2. Week Sales (actual) 3-day weighted moving average |error| 4-day weighted moving average |error| 1 17 2 21 3 27 4 31 21.7 9.3 5 19 26.3 7.3 24.0 5.0 6 17 25.7 8.7 24.5 7.5 7 21 22.3 1.3 23.5 2.5 8 19.0 22.0 MAD (3-day) = (9.3+7.3+8.7+1.3)/4 = 6.65 MAD (4-day) = (5.0+7.5+2.5)/3 = 5.0 The four week moving average is more accurate as it has lower MAD. The forecast for week 8 using this method is 22.0 3. MAD (for a = 0.10) = 82.45/8 = 10.31 MAD (for a = 0.50) = 98.62/8 = 12.33 Using a smoothing average of 0.10 is more accurate as it has lower MAD.