New assignment 2 Instructions

Submit

the

solutions

to

each

of

the

following

3

problem

assignments

in

one

MS

Word

document.

Assignment

#

1

A

ski

repair

shop

at

a

resort

in

Colorado

sells

replacement

poles

each

season.

The

shop

needs

to

develop

a

forecast

of

next

season’s

sales

so

that

they

can

place

an

order

for

poles

with

their

supplier

well

in

advance

of

the

beginning

of

the

season.

Sales

data

for

the

past

five

years

are

shown

below.

Compare

the

forecasts

given

by

the

following

models.

Year:

1

2

3

4

5

Sales

(units):

350

395

345

385

395

Develop

forecasts

using:

1.

a.

A

5

year

moving

average.

b.

A

weighted

moving

average

model

with

weights

of

0.2,

0.2,

0.1,

0.3,

and

0.2

for

years

1

through

5

respectively.

c.

An

exponential

smoothing

model

with

year

1

forecast

of

380

and

α=

0.3.

Assignment

#

2

Togo

makes

riding

lawn

mowers

and

tractors.

The

company’s

expected

quarterly

demand

is

given

below

in

the

chart.

The

company

will

have

300

mowers

in

inventory

at

the

beginning

of

the

month

an

d

desires

to

maintain

at

least

that

number

at

the

end

of

each

month.

Below

is

other

critical

data:

Production

cost

per

unit

=

$325

Inventory

Carrying

cost

per

quarter

per

unit

=

$50

(based

on

ending

inventory)

Hiring

Cost

per

worker

=

$350

Firing

cost

per

worker

=

$700

Beginning

#

of

workers

=

40

Each

worker

can

produce

150

units

per

quarter

Complete

the

tables

and

calculate

the

cost

of

the

two

plans

LEVEL

Plan

Quarter

Demand

Regular

Production

Ending

Inventory

Workers

Required

Hire

Fire

1

5000

2

9000

3

7000

4

9000

Total

30,000

Submit the solutions to each of the following 3 problem assignments in one

MS Word document.

Assignment # 1

A ski repair shop at a resort in Colorado sells replacement poles each season. The shop

needs to develop a forecast of next season’s sales so that they can place an order for

poles with their supplier well in advance of the beginning of the season. Sales data for

the past five years are shown below. Compare the forecasts given by the following

models.

Year: 1 2 3 4 5

Sales(units): 350 395 345 385 395

Develop forecasts using:

1.

a. A 5 year moving average.

b. A weighted moving average model with weights of 0.2, 0.2, 0.1, 0.3, and 0.2 for

years 1 through 5 respectively.

c. An exponential smoothing model with year 1 forecast of 380 and α= 0.3.

Assignment # 2

Togo makes riding lawn mowers and tractors. The company’s expected quarterly demand is

given below in the chart. The company will have 300 mowers in inventory at the beginning of

the month and desires to maintain at least that number at the end of each month. Below is other

critical data:

Production cost per unit = $325

Inventory Carrying cost per quarter per unit = $50 (based on ending inventory)

Hiring Cost per worker = $350

Firing cost per worker = $700

Beginning # of workers = 40

Each worker can produce 150 units per quarter

Complete the tables and calculate the cost of the two plans

LEVEL Plan

Quarter Demand Regular

Production

Ending

Inventory

Workers

Required

Hire Fire

1 5000

2 9000

3 7000

4 9000

Total 30,000