A few questions for my operation management business class

Chapter 12: Forecasting

Instruction: For Question 1, you can easily find the answers after reading the book. For Question 2, please first be familiar with how to use the equations given in the book. Particularly, for I(b), keep in mind that the largest weight is assigned to the most recent data value, the second largest weight is assigned to the second most recent data value, the third largest weight is assigned to the third most recent data value. For II, you have to calculate MADs for all three forecasting techniques in I, then the one with the smallest MAD generates the most accurate forecasts.

1. How to differentiate qualitative methods and quantitative methods in forecasting? What methods are in the quantitative category?

2. An electrical contractor’s records during the last five weeks indicate the number of job requests:

Week: 1 2 3 4 5

Requests: 20 22 18 21 22

I. Predict the number of requests for week 6 using each of these methods:

a. A 4-period moving average

b. Three-period weighted moving average, with weights 0.6, 0.3, 0.1 assigned in the sequence of most recent data.

c. Exponential smoothing with a smoothing constant 0.30. Use 20 for week 2 forecast.

II. Calculate MAD for each of the above forecasting techniques and determine which one yields more accurate forecast.

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