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Midterm_2_2009_Solutions

# Midterm_2_2009_Solutions - IEOR 150 Midterm II Solution 1...

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IEOR 150 Midterm II Solution 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 0.15 α = . 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) Solution: a. Forecast for week 4= (14+9+30)/3=18 Forecast for week 5= (9+30+22)/3=20 Forecast for week 6= (30+22+34)/3=29 Forecast for week 7= (22+34+12)/3=23 Forecast for week 8= (34+12+29)/3=22 b. Forecast for week 4= 18 Forecast for week 5= 0.15*22+0.85*18=18 Forecast for week 6= 0.15*34+0.85*18=21 Forecast for week 7= 0.15*12+0.85*21=19 Forecast for week 8= 0.15*19+0.85*19=19 c. MAD for part a = 7.9

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Midterm_2_2009_Solutions - IEOR 150 Midterm II Solution 1...

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