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midterm 2 cheat sheet (final exam)

midterm 2 cheat sheet (final exam) - Answer report Left...

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Answer report Left hand side = right hand side BINDING Left hand side ≠ Right hand side NON BINDING If non-binding you have leftover and should of put more money towards more units Slack would be the difference between left hand side & right hand side Shadow price Ex. If malt increases from 50 60 what will be optimal value of objective function Originally was 380 so 380 + (60-50) x 3 = 410 o You multiply by 3 b/c 3 is the shadow price of malt (for every increase of 1 you multiply by 3) Forecasts Group forecasts are more accurate than individual forecasts Moving average with small period generates better forecast than one with large period Exponential smoothing with large alpha generates better forecast than with small alpha The larger the n, the smoother it is The smaller the n, the more responsive to change of demand The larger the ά, the more responsive your forecast tends to be The smaller the ά, the more weight you give to historical data & the smoother it is when there is a trend in the data, using more observations results in a forecast with larger error
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