DeVry BSOP 209 Week 1 Assignment 2014

Homework

Complete the following problems from Chapter 4 in your text. The Homework Problems Rubric is in Doc Sharing.

· Problem 4.2 a, b and c

· Problem 4.6 a, b and c

· Problem 4.9 a, b, c and d

Submit your assignment to the Dropbox located on the silver tab at the top of this page.

Problem 4.2:

	Year
	1	2	3	4	5	6	7	8	9	10	11
Demand	7	9	5	9	13	8	12	13	9	11	7

a) Plot the above data on a graph. Do you observe any trend, cycles, or random variations?

b) Starting in year 4 and going to year 12, forecast demand using a 3-year moving average. Plot your forecast on the same graph as the original data.

c) Starting in year 4 and going to year 12, forecast demand using a 3-year moving average with weights of .1, .3, and .6, using .6 for the most recent year. Plot this forecast on the same graph.

Problem 4.6

The monthly sales for Telco Batteries, Inc., were as follows:

Month	Sales
January	20
February	21
March	15
April	14
May	13
June	16
July	17
August	18
September	20
October	20
November	21
December	23

a) Plot the monthly sales data.

b) Forecast January sales using each of the following:

c) With the data given, which method would allow you to forecast by Cinema-Plus-1.6c" style="border: none !important; display: inline-block !important; text-indent: 0px !important; float: none !important; font-weight: bold !important; height: auto !important; margin: 0px !important; min-height: 0px !important; min-width: 0px !important; padding: 0px !important; text-transform: uppercase !important; text-decoration: underline !important; vertical-align: baseline !important; width: auto !important; background: transparent !important;">next March’s sales?

Problem 4.9

Dell uses the CR5 chip in some of its laptop computers. The prices for the chip during the past 12 months were as follows:

Month	Price Per Chip	Month	Price Per Chip
January	$1.80	July	1.80
February	1.67	August	1.83
March	1.70	September	1.70
April	1.85	October	1.65
May	1.90	November	1.70
June	1.87	December	1.75

a) Use a 2-month moving average on all the data and plot the averages and the prices.

b) Use a 3-month moving average and add the 3-month plot to the graph created in part (a).

c) Which is better (using the mean absolute deviation): the 2-month average or the 3-month average?

d) Compute the forecasts for each month using exponential smoothing, with an initial forecast for January of $1.80. Use ? = .1, then ? = .3, and finally ? = .5. Using MAD, which ? is the best?