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    Activity A5. Yamilex Robledo

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    Yamilex Campoy
    The document contains 3 practice problems related to forecasting techniques: 1) developing a 3-week moving average for auto sales data, 2) calculating a forecast using simple exponential smoothing, 3) determining the least squares trend line and predicted value for a time series data set.

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    © All Rights Reserved
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    Activity A5. Yamilex Robledo

    Uploaded by

    Yamilex Campoy
    12 views3 pages
    The document contains 3 practice problems related to forecasting techniques: 1) developing a 3-week moving average for auto sales data, 2) calculating a forecast using simple exponential smoothing, 3) determining the least squares trend line and predicted value for a time series data set.

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    Value and supply chain

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    The document contains 3 practice problems related to forecasting techniques: 1) developing a 3-week moving average for auto sales data, 2) calculating a forecast using simple exponential smoothing, 3) determining the least squares trend line and predicted value for a time series data set.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    12 views3 pages

    Activity A5. Yamilex Robledo

    Uploaded by

    Yamilex Campoy
    The document contains 3 practice problems related to forecasting techniques: 1) developing a 3-week moving average for auto sales data, 2) calculating a forecast using simple exponential smoothing, 3) determining the least squares trend line and predicted value for a time series data set.

    Copyright:

    © All Rights Reserved
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    Practice Problems

    Chapter 4—Forecasting

    Problem 1:

    Auto sales at Carmen’s Chevrolet are shown below. Develop a 3-week moving average.

    Week Auto Sales

    1 8

    2 10

    3 9

    4 11

    5 10

    6 13

    7 -

    Ʃ 𝑑𝑒𝑚𝑎𝑛𝑑 𝑖𝑛 𝑝𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠


    𝑴𝒐𝒗𝒊𝒏𝒈 𝒂𝒗𝒆𝒓𝒂𝒈𝒆:
    𝑛

    Week Auto sales 3-week moving average


    1 8
    2 10
    3 9
    4 11 (8 + 10 + 9) / 3 = 9
    5 10 (10 + 9 + 11) / 3 = 10
    6 13 (9 + 11 + 10) / 3 = 10
    7 - (11 + 10 + 13) / 3 = 11.33
    Problem 2:

    A firm uses simple exponential smoothing with  = 0.1 to forecast demand. The forecast
    for the week of January 1 was 500 units whereas the actual demand turned out to be 450
    units. Calculate the demand forecast for the week of January 8.

    Ft = Ft – 1 + ơ (At – 1 - Ft – 1)
    = 500 + 0. 1 (450 – 500) = 495 units

    Problem 3:
    Use the sales data given below to determine: (a) the least squares trend line, and (b) the
    predicted value for 2013 sales.

    Year Sales (Units)

    2006 100

    2007 110

    2008 122

    2009 130

    2010 139

    2011 152

    2012 164

    To minimize computations, transform the value of x (time) to simpler numbers. In this case,
    designate year 2006 as year 1, 2007 as year 2, etc.
    Time period Sales (units)
    Year x² xy
    (x) (y)
    2006 1 100 1 100
    2007 2 110 4 220
    2008 3 122 9 366
    2009 4 130 16 520
    2010 5 139 25 695
    2011 6 152 36 912
    2012 7 164 49 1148
    Ʃ𝑥 = 28 Ʃ𝑦 = 917 Ʃ𝑥² = 140 Ʃxy = 3961

    Ʃ𝑥 28
    𝑥= = =4
    𝑛 7
    Ʃ𝑦 917
    𝑥= = = 131
    𝑛 7

    Ʃ𝑥𝑦 − 𝑛𝑥𝑦 3961 − (7)(4)(131) 293


    𝑏= = = = 10.46
    Ʃ𝑥² − 𝑛𝑥² 140 − (7)(42 ) 28

    ơ = 𝑦 − 𝑏𝑥 = 131 − 10.46 ∗ 4) = 89.16

    (a) The least squares trend line


    Therefore, the least squares trend equation is:
    Y = ơ + bx = 89.𝟏𝟔 + 𝟏𝟎. 𝟒𝟔𝐱

    b) The predicted value for 2013 sales


    To project demand in 2013, we denote the year 2013 as x = 8, and:
    Sales in 20𝟏3 = 89. 𝟏𝟔 + 𝟏𝟎. 𝟒𝟔 ∗ 𝟖 = 𝟏𝟕𝟐. 𝟖𝟒

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