2.12. Describe the underlying logic behind smoothing methods (5pts). 2.13. What
ID: 423511 • Letter: 2
Question
2.12. Describe the underlying logic behind smoothing methods (5pts).
2.13. What is the M/M/1 queueing model? (4pts)
2.14. Discuss the difference between the EOQ and EPQ models (4pts).
2.15. Discuss the concept of safety stock in stochastic inventory management (5pts).
2.7. Describe two utilities of DSM (there are more utilities, but you just need to describe only two of those) (3pts).
2.8. Discuss the difference between the clustering and sequencing of DSM (4pts).
2.9. Discuss what the servitization is and why it is important (4pts).
2.10. Criticize the abuse of Cpk (6pts).
Explanation / Answer
2.12
Smoothing methods are used in forecasting and it considers the past values and add it coming forecast. It means that future forecast is inclusive of the past trends. It gives stability and more credibility to the forecasting method. So, the forecasting method delivers the smooth line that can be used to predict the future.
It can be understood by the following example.
For exponential smoothening forecast,
Forecast for period 2 = (closing value of period 1 – forecast of period 1)*alpha + forecast of period 1
Forecast of period 3 = (closing value of period 2 – forecast of period 2)*alpha + forecast of period 2
Or
Forecast of period 3 = (closing value of period 2 – (closing value of period 1 – forecast of period 1)*alpha + forecast of period 1) *alpha + forecast of period 2
Now, it can be seen that forecast of period 3, has already included the value of period 1, and 2 and discounted it using alpha.
Here, alpha = 2/(N+1)
N = number of period
Bigger the number of period, will cause more smoothening and reliable forecast with smaller forecasting error. So, smoothening is used.
2.13
It is the one specific application of waiting line in operation management. Under the M/M/1 model, there is one service provider terminal and one queue that is being served by the service provider terminal. Here, there is arrival rate of the consumers or objects and the service rate of the terminal per unit of time being served by the terminal.
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