1.
Use exponential smoothing with
α
= 0.2 to calculate smoothed averages and a forecast for
period 7 from the data below. Assume the forecast for the initial period is 7.
Period
Demand
1
10
2
8
3
7
4
10
5
12
6
9
Period
Demand
Forecast
1
10
7.0
2
8
7.6
3
7
7.7
4
10
7.5
5
12
8.0
6
9
8.8
2.
A management analyst is using exponential smoothing to predict merchandise returns at an
upscale branch of a department store chain. Given an actual number of returns of 154 items
in the most recent period completed, a forecast of 172 items for that period, and a
smoothing constant of 0.3, what is the forecast for the next period? How would the forecast
be changed if the smoothing constant were 0.6? Explain the difference in terms of alpha
and responsiveness.
166.6; 161.2
The larger the smoothing constant in an exponentially smoothed forecast, the
more responsive the forecast.
3.
What is the forecast for May based on a weighted moving average applied to the following
past demand data and using the weights: 4, 3, 2 (largest weight is for most recent data)?
Nov.
Dec.
Jan.
Feb.
Mar.
April
37
36
40
42
47
43
2x42 + 3x47 + 4x43 = 84+141+172 = 397; 397/9 = 44.1 (note we divide by the sum of the
weights; if the weights summed up to 1.0, the division step would not be required)
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4.
Given the following data, calculate the threeyear moving averages for years 4 through 10.
Year
Demand
1
74
2
90
3
59
4
91
5
140
6
98
7
110
8
123
9
99
Year
Demand
3Year Moving Ave.
1
74
2
90
3
59
4
91
74.33
5
140
80.00
6
98
96.67
7
110
109.67
8
123
116.00
9
99
110.33
110.67
5.
Distinguish a dependent variable from an independent variable.
The independent variable causes some behavior in the dependent variable; the
dependent variable shows the effect of changes in the independent variable.
(Associative forecasting methods: Regression and correlation, moderate)
6.
Explain, in your own words, the meaning of the coefficient of determination.
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 Spring '11
 Das
 Management, Forecasting, Linear Regression, Regression Analysis, management analyst, Associative Forecasting Methods

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