Order Forecasting Methods Assignment

Order Forecasting Methods Assignment
a. Compute a 3-month moving average forecast for months 4 through 9.
b. Compute a weighted 3-month moving average forecast for months 4 through 9. Assign
weights of 0.55, 0.35, and 0.10 to the months in sequence, starting with the most recent
month.
c. Compare the two forecasts by using MAD. Which forecast appears to be more accurate?
2. The manager of the Petroco Service Station wants to forecast the demand for unleaded gasoline
next month so that the proper number of gallons can be ordered from the distributor. The owner has
accumulated the following data on demand for unleaded gasoline from sales during the past 10
months:
MAT540 Homework Week 4
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Month Gasoline Demanded (gal.)
October 775
November 835
December 605
January 450
February 600
March 700
April 820
May 925
June
July
1500
1200
Order Forecasting Methods Assignment
a. Compute an exponential smoothed forecast, using an α value of 0.4
b. Compute the MAD.
3. Emily Andrews has invested in a science and technology mutual fund. Now she is considering
liquidating and investing in another fund. She would like to forecast the price of the science and
technology fund for the next month before making a decision. She has collected the following data
on the average price of the fund during the past 20 months:
Month Fund Price
1 $55 ¾
2 54 ¼
3 55 1/8
4 58 1/8
5 53 3/8
6 51 1/8
7 56 ¼
8 59 5/8
9 62 ¼
10 59 ¼
11 62 3/8
12 57 1/1
MAT540 Homework Week 4
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13 58 1/8
14 62 ¾
15 64 ¾
16 66 1/8
17 68 ¾
18 60.5
19 65.875
20 72.25
Order Forecasting Methods Assignment
a. Using a 3-month average, forecast the fund price for month 21.
b. Using a 3-month weighted average with the most recent month weighted 0.5, the next most
recent month weighted 0.30, and the third month weighted 0.20, forecast the fund price for
month 21.
c. Compute an exponentially smoothed forecast, using α=0.3, and forecast the fund price for
month 21.
d. Compare the forecasts in (a), (b), and (c), using MAD, and indicate the most accurate.
4. Carpet City wants to develop a means to forecast its carpet sales. The store manager believes that
the store’s sales are directly related to the number of new housing starts in town. The manager has
gathered data from county records on monthly house construction permits and from store records
on monthly sales. These data are as follows:
Monthly Carpet Sales