Forecasting Questions (Practice) PDF

Preview

Summary

3twqert...

Description

COMM 225: 225: P COMM POM OM TO TOPIC PIC 3: FO FOREC REC RECAS AS ASTIN TIN TING G –PR PRAC AC ACTIC TIC TICE EQ QUE UE UEST ST STIO IO IONS NS Q1 (Ref: Q. 3-5, p100 of the text book): Freight car loadings during an 18-week period at a port are:

Week

Number

Week

Number

Week

Number

1

220

7

350

13

460

2

245

8

360

14

475

3

280

9

400

15

500

4

275

10

380

16

510

5

300

11

420

17

525

6

310

12

450

18

541

(a) Compute a linear trend line for freight car loadings. (Use of Excel’s Trendline, with display Equation on chart option, is recommended). (b) Use the trend equation to predict loadings for weeks 19 and 20. (c) The manager intends to install new equipment when the volume reaches 700 loadings per week. Assuming the current trend continues, the loading volume will reach that level in approximately what week? Q2 (Ref: Q.3-11, p101 of the text book): A gift shop in a tourist centre is open only on weekends (Friday, Saturday, and Sunday). The owner —manager hopes to improve scheduling of part-time employees by determining seasonal relatives for each of these days. Data on recent activity at the store (sales transactions per day) are shown in the following table: Week

Friday Saturday Sunday

1

2

3

4

5

6

149 250 166

154 255 162

152 260 171

150 268 173

159 273 176

163 276 183

(a) Develop seasonal relatives for each day using the centred moving average method. (b) Deseasonalize the data, fit an appropriate model to the deseasonalized data, project three days ahead, and reseasonalize the projections to forecast the sales transactions for each day, Fa1tulay, of next week. Q3 (Ref: Q. 3-16, p102 of the text book): A pharmacist has been monitoring sales of a certain over-the-counter (i.e., no prescription is needed) pain reliever. Daily sales during the last 15 days were:

Day: Number sold: Day: Number sold:

1 2 3 4 5 6 7 8 9 36 38 42 44 48 49 50 49 52 10 11 12 13 14 15 48 52 55 54 56 57

(a) If you learn that on some days the store ran out of this pain reliever, would that knowledge cause you any concern regarding the use of sales data for forecasting demand? Explain. (b) Assume that there was no stock-outs. Plot the data. Is the linear trend model appropriate for this item? Explain. (c) Using trend-adjusted exponential smoothing with initial smoothed series and trend determined from days 1 to 8 and α = β= .3, develop forecasts for days 9 through 16.

1/2

Q4 (Ref: Q. 3-28, p105 of the text book): An analyst must decide between two different forecasting techniques for weekly sales of inline skates: a linear trend equation and the naïve approach. The linear trend equation is Yt= 124+ 2t, and it was developed using data from periods 1 through 10. Based on data for periods 11 through 19 as shown below, which of these two methods has greater accuracy? (You can use any one of the three measures of forecast errors). t

Units Sold

t

Units Sold

11 12 13 14 15

147 148 151 145 155

16 17 18 19

152 155 157 160

Q5 (Ref: Q. 3-32, p106 of the text book): A textbook publishing company has compiled data on total annual sales of its business text books for the preceding eight years:

Year: Sales (000):

1 2 3 4 5 6 7 8 40.2 44.5 48.0 52.3 55.8 57.1 62.4 69.0

(a) Plot the data and fit an appropriate model to it. Forecast the preceding eight years, and determine the forecast errors. Finally, construct a 2s control chart. (b) Using the model, forecast textbook sales for each of the next five years. (c) Suppose actual sales for the next five years turn out as follows:

Year: Sales (000):

9 73.7

10 77.2

11 82.1

12 87.8

13 90.6

Calculate the forecast errors for years 9 to 13. Is the forecasting process in control? Explain. Q6 (Ref: Q. 3-33, p106 of the text book): A manager has just received an evaluation from an analyst on two potential forecasting methods. The analyst is indifferent between the two methods, saying that they should be equally accurate and in control. The demand and the forecasts using the two methods for nine periods follow:

Period: Demand: Method 1: Method 2:

1 37 36 36

2 3 39 37 38 40 37 38

4 5 6 39 45 49 42 46 46 38 41 52

7 47 46 47

8 9 49 51 48 52 48 52

(a) Calculate the MSE for each method and compare the two methods. (b) Construct a 2s control chart for each method and interpret them. Do you agree with the analyst? Explain....