1. Forecasts and actual sales of Fidget spinners in a convenient store are as fo
ID: 365258 • Letter: 1
Question
1. Forecasts and actual sales of Fidget spinners in a convenient store are as follows:
Month
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Sales
170
229
192
241
238
210
225
179
a. What is the forecast for November using a two-period moving average? [5 points]
b. What is the forecast for November using a three-period moving average? [5 points]
c. Calculate the forecasted demand using 2-period and 3-period moving average methods. What are the Mean Squared Errors (MSE) for the two- and three-period moving average models? [5 points]
d. Based on the MSE, which number of periods for the moving average should be used for the model? (2 period or 3 period)? Describe why. [5 points]
e. What are the forecasts for November using single exponential smoothing with =0.1 and =0.8. [5 points]
f. Calculate the forecasted demand using single exponential smoothing with =0.1 and =0.8. What are the MSE for two methods? [5 points]
g. What is the best single exponential smoothing model by evaluating MSE? Describe why. [5 points]
h. Plot the Sales and Forecast data for (f). Provide insides about the time series. [5 points]
2. Crossroad Inn is a small bed-and-breakfast inn. Following table shows the weekly bar sales and number of guests registered for the same week. The manager assumes the bar sales are related to the number of registered guests.
Week
Guests
Bar Sales
1
50
$2,550
2
45
$2,475
3
33
$2,295
4
40
$2,400
5
60
$2,700
6
30
$2,250
7
52
$2,580
a) Develop a simple linear regression model that relates bar sales to guests (not to time). [10 points]
b) If the forecast for 8th week is 55 guests, how much bar sales can be expected? [10 points]
3. Tyrell Garden Supply is a manufacturer of outdoor gardening equipment and storage devices. Tyrell Garden Supply’s storage shed sales for the past year is given in the table below:
Month
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Shed Sales
10
12
13
16
19
23
26
30
28
18
16
14
a. What are the forecasts for January (next year), using a two-period and three-period moving average? [10 points]
b. Compute MAPE for the two- and three-period moving average models and compare your results. What is the best number of periods for the moving average model based on MAPE? [10 points]
c. Find the best single exponential smoothing model by evaluating the MSE from 0.1 to 0.9, in increments of 0.1. [10 points]
Month
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Sales
170
229
192
241
238
210
225
179
Explanation / Answer
1-
a-November= (225+179) /2=202
b- November=(210+225+179)/3=205
c-MSE of 2-period moving average=3801/6=633.5
MSE of 3-period moving average=4482/5=896.4
d-2-period moving average have less error than 3-period moving average hence 2-period is best to use.
Month Sales 2period moving average Error Error2 3-Period moving average Error Error2 Mar 170 - - - - - - Apr 229 - - - - - - May 192 199.5 -7.5 56 - - - June 241 210.5 30.5 930 197 44 1936 july 238 216.5 21.5 462 221 17 289 Aug 210 239.5 -29.5 870 224 -14 196 sept 225 224 -1 1 230 -6 36 Oct 179 217.5 -38.5 1482 224 -45 2025 Total 3801 4482Related Questions
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