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Assignment 2

# Assignment 2 - Assignment 2 6 The accuracy of a forecasting...

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Assignment 2 6) The accuracy of a forecasting method depends on the data that is used. If demand is strongly linear and it is safe to assume that it will stay this way, linear regression is the most accurate way of forecasting demand. However, for non-linear demand, exponential smoothing is the most accurate, especially with trend included. It is very accurate as long as an effective smoothing constant is used. This is because recent demand much more accurately represents future demand and exponential smoothing takes this into account. Also, the shortcoming of demand lagging can be minimized by adding a trend factor to the forecast. 2) a) F July = 0.60(A June )+0.30(A May )+0.10(A April ) = 0.60(15)+0.30(16)+0.10(12) = 9 + 4.8 + 1.2 = 15 b) F July = (A June + A May + A April )/3 = (15 + 16 + 12)/3 = 14.333 c) F July = F June + α(A June - F June ) = 13 + 0.2(15-13) = 13 + 0.4 = 13.4 d) a = y – b x b = ( - * xy nx y ) / ( - ) x2 nx2 = x (1+2+3+4+5+6)/6 = 3.5 = y (12+11+15+12+16+15)/6 = 13.5 = * + * + * + * + * + * - * . * . + + + + + - b 1 12 2 11 3 15 4 12 5 16 6 15 6 3 5 13 512 22 32 42 52 62 * . = - . - . = . . =. 6 3 52 297 283 591 73 5 13 517 5 771 = . - . . = . - . = . a 13 5 7713 5 13 5 2 6985 10 8015 = . +. Y 10 8015 771x e) F July = 10.8015 + .771(7) = 16.1985 15) a) F 4 = (62+65+67)/3 = 64.7 F 5 = (65+67+68)/3 = 66.7

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