This preview shows pages 1–3. Sign up to view the full content.
IEOR 150 Midterm II (Fall 08)
Name: Daphne
Student ID #:
1. Observations of the monthly demand of a particular brand of coffee maker at a retail
store is the following:
Month
Demand
Jan
200
Feb
250
Mar
175
Apr
186
May
225
(a)
What were the onestepahead forecasts of demand for these five months using
exponential smoothing with
0.15
α
=
(assume the forecast for Jan was 200 to get
started). (4 points)
1
21
1
32
2
43
3
54
4
200
(1
)
200
)
207.5
)
202.625
)
200.131
F
FD
F
F
F
F
αα
=
=+
−
=
−
=
−
=
−
=
(b)
If we use
0.35
=
instead of
0.15
=
, do you expect the forecasts to be more
stable or more unstable than what you get in (a)? Please explain. (3 points)
The variance will become bigger because we put more weight on the actual demand
by increasing
, and the actual demand exhibits higher variance than the forecasts.
(c)
Keep
0.15
=
, what is the forecast of demand in August (forecast made at the end
of May)? (2 points)
One stepahead and multiplestepahead forecasts are the same:
85
5
)
203.86
F
−
=
(d)
Give a oneortwosentence explanation of why the method is called “exponential
smoothing”. (1 point)
The exponential smoothing applies a declining set of weights to all past data, and
we could fit the continuous exponential curve to these weights.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document2. The table below records the quarterly demand of a kind of purse at a small
This is the end of the preview. Sign up
to
access the rest of the document.
 Fall '09

Click to edit the document details