Not all the items in your office supply store are evenly distributed as far as d

Question

Not all the items in your office supply store are evenly distributed as far as demand is concerned, so you decide to forecast demand to help plan your stock. Past data for legal-sized yellow tablets for the month of August are Week 1 Week 2 Week 3 Week 4 305 405 605 705 a. Using a three-week moving average, what would you forecast the next week to be? (Round your answer to the nearest whole number.) orecast for the week 5 b. Using exponential smoothing with ? = 0.20, if the exponential forecast for week 3 was estimated as the average of the first two weeks [(305+405)2 355], what would you forecast week 5 to be? (Round your answer to the nearest whole number.) Forecast for the week 5

Explanation / Answer

A) Forecast for the fifth week using 3 weeks moving average method is given by (D2+D3+D4)/3 where D2,D3,D4 are last 3 weeks actual demands.

So the answer is (405+605+705)/3

= 571.667 ~ 572

B) To find the foracast for the fourth week, we need forecast for the 4th which can be calculated using 3rd Week forecast which is given as (305+405)/2 = 355

Forecast of present week is given by

F present = (Alpha*Previous demand) + ((1-Aplha)*Previous forecast)

Given Alpha = 0.2

F 4 = (Alpha*D3) + (1-aplha)*F3

F 4 = (0.2*605) + (0.8*355)

= 405

F5 = (alpha*D4) + (1-alpha)*F4

= (0.2*705) + (0.8*405)

= 465

So th forecast for the 5th week, using expinential smoothing technique is 465

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.