operations 6&7

Chapter 8

Question 6

6. (a) Given the following historical data, which value of α do you think would be better to use?

MAD is lesser in case of α = 0.10. Hence that is a better value to use.

(b) Is your answer the same as in Problem 5? Why or why not?

Yes, the answer is the same as the trend remains the same in both cases

Question 8

Make a forecast including trend for the month of January.

Time Period (t)			Actual (A)	Smoothed Avg (S)	Smoothed Trend (T)	Forecast (FIT)
Nov	0.20	0.10		1000	200
Dec	0.20	0.10	1100	1180	198
Jan	0.20	0.10				1378

Question 10

If Mario expects total demand for next week to be around 350, what is the forecast for each day of next week?

Day	Forecast
Tuesday	47.00
Wednesday	32.00
Thursday	30.00
Friday	87.00
Saturday	92.00
Sunday	63.00
	351.00

Chapter 9

Question 2

Compute the design and effective capacity utilization measures. What do they tell you?

The actual output is 136% more than the effective output. This means that the equipment is functioning at a higher efficiency.

The actual output is only 95% of the Design output. This means that the equipment is functioning at a rate lesser than what it is designed to produce.

Question 8

(b) Solve the decision tree and decide what the bakery should do.

The large expansion has a higher expected value ($ 71,000) when compared to the smaller expansion. Hence, it will be ideal to consider a large expansion. However, one has to consider the capital investment cost before making the decision.

Question 10

Draw a decision tree and solve the problem. What should Spectrum do?

The company should still go for a large expansion as the expected value is higher.

Question 12

Using the procedure for factor rating, decide on the better location.

Using factor rating, Location 1 has a higher rating of 390 and hence should be chosen.

Question 14

Use factor rating to help the restaurant decide on the better location.

Using factor rating, Location 1 has a higher rating of 390 and hence should be chosen.

16. A company uses exponential smoothing with trend to forecast monthly sales of its product, which show a trend pattern. At the end of week 5, the company wants to forecast sales for week 6. The trend through week 4 has been 20 additional cases sold per week. Average sales have been 85 cases per week. The demand for week 5 was 90 cases. The company uses α = 0.20 and β = 0.10. Make a forecast including trend for week 6.

17. The number of patients coming to the Healthy Start maternity clinic has been increasing steadily over the past eight months. Given the following data, use a linear trend line to forecast attendance for months 9 and 10.

Month	Clinic Attendance (in thousands)
1	3.4
2	3.9
3	4.5
4	5.0
5	5.8
6	5.9
7	6.5
8	6.7

18. Given the following data, use exponential smoothing with α = 0.2 and α = 0.5 to generate forecasts for periods 2 through 6. Use MAD and MSE to decide which of the two models produced a better forecast.