Forecasting/MAD/Exponential Smoothing problem solving homework (Operations Management)

Department: Management

Unit Name: Production and Operations Management

Unit Code: MGMT19126

Instructor Name: Dr. Mohamad Atyeh

Assessment 1: Take home / First Assignment

Submission: Week 6, Monday February 29, 2016

At 12:00 pm

Student’s Name:
ID #:

INSTRUCTIONS

1. You are expected to answer all the questions

2. You have to submit a hardcopy and a softcopy

3. Please ensure best practice and avoid PLAGIRISM

4. This assignment is worth 30% of your final grade

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Production and Operations Management

MGMT19126 – 151MGB414

First Assessment (Solving Problems)- 30 marks (30%)

Question 1: Sales of quilt covers at Jim's departmental store in Melbourne over the last 12 months are shown below:

Period	Demand
July 2012	21
August	22
Sep	15
Oct	14
Nov	12
Dec	15
Jan 2013	18
Feb	19
March	21
April	21
May	22
June	25

Calculate:

I. Use a 2-month moving average on all the data and plot the forecast demand (5 mark)

F1= (25+22)/2 = 23.5

II. Use a 3-month moving average on all the data and plot the forecast demand to graph created in part (I) (5 mark)

F2= (25+22+21)/3= 22.66 rounded up 22.7

III. Using MAD technique determine which is better: the 2-month moving average or the 3-month moving average (5 mark)

IV. Compute forecasts for July 2013 using exponential smoothing with an alpha of 0.3, and March forecast of 19. Explain (5 mark)

Question 2: A department store may find that in a 4-month period, the best forecast is derived by using 40% of the actual sales (in units) for the most recent month, 30% of two months ago, 20% of three months ago, 10% of four months ago. The actual unit sales were as follows:

Month1 Month2 month3 month4 month5

110 160 85 125 ?

(i) What is the forecast for month 5? (5 mark)

(ii) Suppose sales for month 5 are 115, and then the forecast for month 6 would be? Explain (5 mark)