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.
