MFG Manufacturing company (MFG) would like to determine how many pounds of raw m

Question

MFG Manufacturing company (MFG) would like to determine how many pounds of raw material A should be purchased from its supplier SUB Supply Company (SUB) next year. One pound of raw material A is needed to produce pound 0.8 pound of end product B. Next year MFG plans to produce 50 pounds per day of end product B in each of its 250 working days. Furthermore MFG plans to purchase all of its yearly equipment of raw material A from SUB next year. Based on these information, how many pounds of raw material A should be purchased from SUB next year? A. 10,000 B. 12, 500 C. 15,000 D. Not enough information given to answer this question E. None of the above The 4-year historical demand (in units) for a luxury jet were: Using the exponential smoothing method with weigh (ALPHA) equals to 0.8, the forecast for year 5 is A. 1950.88 B. 1963.20 C. 1963.78 D. Not enough information given to this question answer E. None of the above

Explanation / Answer

2)

Forecast for Year 2 = Forecasted demand 1 + alpha * ( Actual demand1 - Forecast demand 1)

= 1952 + 0.8 * ( 1952 - 1952) = 1952

Forecast for Year 3 = Forecasted demand 2 + alpha * ( Actual demand 2 - Forecast demand 2)

= 1952 + 0.8 * ( 1975 - 1952) = 1970.4

Forecast for Year 4 = Forecasted demand 3 + alpha * ( Actual demand 3 - Forecast demand 3)

= 1970.4 + 0.8 * ( 1946 - 1970.4) = 1950.88

Forecast for Year 5 = Forecasted demand 4 + alpha * ( Actual demand 4 - Forecast demand 4)

= 1950.88 + 0.8 * ( 1967 - 1950.88) = 1963.78

Answer is Option C)

Year Actual Demand Forecast Demand 1 1952 1952 2 1975 1952 3 1946 1970.4 4 1967 1950.88 5 1963.776

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