Operations Management: Sustainability and Supply Chain Manageme Quiz: Chapter 4

Question

Operations Management: Sustainability and Supply Chain Manageme Quiz: Chapter 4 Quiz Time Limit: 00:50:00 Submit Q This Question: 1 pt 7of15 (6 complete) ? This Quiz: 15 pts poss The following table shows the actual demand observed over the last 11 years: 7 8 9 10 11 Year Demand 8 9 4 10 11 811 12 9 9 8 This exercise contains only parts b, c, and d b) Using the 3-year moving average, provide the forecast from periods 4 through 12 (round your responses to one decimal place). Year 9 10 11 12 )Using the 3-year weighted moving average iwith weights 0.15, 0 35, and 0 50, using 0 50 for the most recent period. provide the forecast from periods 4 through 12 (round your responses to two decimal places) Year 9 10 11 12 Forecast d) Mean absolute deviation for the forecast developed using the 3-year moving average is 1.86 and for weighted moving average is 2.13 Based on this information, the better forecast is achieved using the the 3-year approach Enter your answer in each of the answer boxes 3:36 PM

Explanation / Answer

b) 3 Year Moving Average

MA(3) = Forecast = Average of last 3 period of demand  

so to calculate the forecast of given period or year = average of last three periods

so for the 4 year , Forecast = (Demand of Year1 + Demand of Year 2 + Demand of Year 3)/3 = (8+9+4)/3 = 7.0

For 5 th Year, Forecast = (Demand of Year2+ Demand of Year 3+ Demand of Year 4)/3 = (9+4+10)/3 = 23/3 = 7.7

In the same way calculate forecast of remaining years

c) 3 year weighted moving Average

WMA(3)=Ft = W1 * Dt-1 + W2*Dt-2 + W3*Dt-2

where W1, W2,W3 are weights

W1 = 0.5

W2 = 0.35

W3= 0.15

for Year 4

F4 = W1 * D3 + W2*D2 + W3*D1 = 0.5*4 + 0.35*9 + 0.15*8 = 6.35

For Year 5

F5 = W1 * D4 + W2*D3 + W3*D2 = 0.5*10 + 0.35*4 + 0.15*9 = 7.75

In the same way calculate for remaining year also

d)

MAD (Mean Absolute Deviation ) of forecast is used to measure the accuracy of forecasted demand. It is used for measuring forecast error. Forecasts with high MAD means it is causing high errors as compare to forecast with lower MAD.

In the given problem , MAD for 3 year Moving Average is 1.86 and MAD for 3 - year weighted moving average is 2.13.

As, MAD for 3 year Moving Average <  MAD for 3 - year weighted moving average

So the forecast error is lesser in 3 year Moving Average.

Better Forecast is achieved using 3 year Moving Average approach.

Year Demand 1 8 2 9 3 4 4 10 5 11 6 8 7 11 8 12 9 9 10 9 11 8

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

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