Grand Canyon ECN601 Module 5 problems

Problem 5-15

1. Data collected on the yearly demand for 50-pound bags of fertilizer at Wallace Garden Supply are shown in the following table. Develop a three-year moving average to forecast sales. Then estimate demand again with a weighted moving average in which sales in the most recent year are given a weight of 2 and sales in the other two years are each given the weight of 1. Which method do you think is best?

Problem 5-17

5-18 Sales of Cool- Man air conditioners have grown steadily during the past five years:
YEAR SALES
1 450
2 495
3 518
4 563
5 584
6 ?

The sales manager had predicted, before the business started, that year 1’ s sales would be 410 air conditioners. Using exponential smoothing with a weight of = 0.30, develop forecasts for years 2 through 6.

Problem 5-24

Emergency calls to Winter Park, Florida's 911 system, for the past 24 weeks are as follows:

Week Calls Week Calls Week Calls

1 50 9 35 17 55

2 35 10 20 18 40

3 25 11 15 29 35

4 40 12 40 20 60

5 45 13 55 21 75

6 35 14 35 22 50

7 20 15 25 23 40

8 30 16 55 24 65

(A) Compute the exponential smoothing forecast of calls for each week. Assume an initial forecast of 50 calls in the first week and use α = 0.1. What is the forecast of the 25th week?

(B) Reforecast each period using a; = 0.6.

(C) Actual calls during the 25th week were 85. Which smoothing constant provides a superior forecast?

5-36 In the past, Judy Holmes’s tire dealership sold an average of 1,000 radials each year. In the past two years, 200 and 250, respectively, were sold in fall, 350 and 300 in winter, 150 and 165 in spring, and 300 and 285 in summer. With a major expansion
planned, Judy projects sales next year to increase to 1,200 radials. What will the demand be each season? Please show work (formulas).