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Midterm_2_2009 - IEOR 150 Midterm II 1 Observed weekly...

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IEOR 150 Midterm II 1. Observed weekly sales of ball peen hammers at the town hardware store over an eight-week period have been 14, 9, 30, 22, 34, 12, 19 and 23 (25 points) (a) Suppose the three-week moving averages are used to forecast sales. Determine the one-step- ahead forecasts for week 4 through week 8 (7 points) (b) Suppose that exponential smoothing is used with a smoothing constant of α = 0.15. Find the exponential smoothing forecasts for week 4 through 8. (To get started, use the same forecast for week 4 as you used in part (a)) (8 points) (c) Based the MAD, which method did better? (5 points) (d) What is the exponential smoothing forecast made at the end of week 6 for the sales in week 12? (5 points) 2. Lakeroad, a manufacturer of hard disks for personal computers, was founded in 1991 and has sold the following numbers of disks: (20 points) Year Number sold (in thousands) Year Number sold (in thousands) 1991 0.2 1995 34.5 1992 4.3 1996 68.2 1993 8.8 1997 85 1994 18.6 1998 58 (a) Suppose the firm uses Holt’s method for forecasting sales. Assume S 0 = 0 and G 0 = 0. Using α =0.2 and β =0.2, find one-step-ahead forecasts for 1992 through 1989 and compute the MAD
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