Question

ASSIGNMENT 2 (CLOI: PLO1: C3) 1. Based on the data given below, Month Demand Jan Feb Mac Apr May Jun Jul Aug Sep Oct Nov Dec 37 40 41 37 4550434756 52 55 54 a) Calculate 4-period and 5-period moving average and forecast the demand in January next year. Which forecast gives the manager the best decision to use as (12 marks) b) the estimate for expenditure of a typical supplier. By giving your answers in 2 decimal places, forecast the manufacturer's income in Jan next year using exponential smoothing with a weight a = 0.4 and a=0.5. (14 marks)

Answer 1

a 4 yearly demand moving average og mere og merge content month demand 4 yearly total 4 yearly moing a percye (trend) - enor (original forecast) JOU 37 Feb x 40 mar x 41 Apr X37 may x-45 155, 38.75 6.05 Jun so 163 4075 9:25 July x 430 173 43-25 -009 43-75 3-25 Aug 175 47. Sep 56r. 9.75 185 Oct 52 - 196 49 3 198 49.5 Dec 54- 210 52.5 1.5 forecast for Jan = 217 = 54.25 MSE = I lemone . 278/2S = 33.976 46.25 5.5 NOV

5 yearly moring average method demand 5 yearly 5 yearly emor month Jan Feb mar Apr x 37 x 45 may 40 to 200 June 426 014 July Aly 2B R16 222 43.2 x 50- xuar 47 56 - 52- 55- 3.8 44.4 11:6 8.8 Sep 241 48.2 Oct 248 1 49.6 NOV 54 8.4 253 50.6 Dec Forecast for Jan - 284:57.8 43.47 MSE: Ecemos?. 304.92 AS MIE ( 4-pevod ) < MSEC s period forecast by 4-period moving average the mag manager the best decision to we as the estimare for expenditure of a typical Supplier

Exponential smoothing Jan Feb mar Apr may June Stt = & Yt + (1x) St Ye: Actual values St: Forecast values d. smoothing constant d: 0.4. 11-2=06 XYE St 37 14.8 40 16 37 41 16.4 38.2 37 19.8 39.32 45 18 38.392 so 20 41.035 43 17:2 44.62 47 188 439726 56 224 45-18 52 20.8 49.51 55 22 505) Jul. Aug sept oct NOV 21:6 52-3) Dec

Forecast for tan = 52.31 x 0.6+21.6 = 52.986 52.99 For x=0.5 t Jan Feb maz Apr may 26 June Yt dyt St emor 37 185 - - 40 20 37 3 41 205 385 0.5 37 18.5 39.75 -2.75 45 22.5 38.37 6.63 41.69 8:31 43 215 45.85 28.85 235 44-43 2.57 4572 10.28 50.86 1.14 27.5 51.43 3.57 54 27 53.22 0.78 215 July Aug 28 Sep 26 oct Nov Dee (53.22x0.5)+27 Jan forecast = = 53.6075 53.61