This assignment involves Demand Forecasting. The attachment includes all of the information for it including the questions that need to be answered. Please let

SCMT491/ERP 611 Homework 1

Q1. We have the following observations of the demand for a certain part stocked at a parts supply depot during the calendar year.

(a) Using a four-month moving average, determine the one-step-ahead forecasts for July through December.

(b) Compute the MAD, MSE, and MAPE for the forecasts obtained in Part (a).

Q2. Handy, Inc., produces a solar-powered electronic calculator that has experienced the following monthly sales history for the first four months of the year, in thousands of units.

If the forecast for January was 25, determine the one-step-ahead forecasts for February through May using exponential smoothing with a smoothing constant of .

Q3. Shoreline Park in Mountain View, California, keeps close tabs on the number of patrons using the park, recording the following figures for the first six months of the calendar year.

(a) Compute the values of the intercept and the slope from the regression equation.

(b) Use the obtained slope value from Part (a) as the initial value of slope and use the predicted number of patrons in June based on the obtained regression line from Part (a) as the initial value of intercept. Assume that and for all calculations. Suppose that the actual number of visitors using the park in July was 2,150 and the number in August was 2,660. Use Holt’s method to update the estimates of the intercept and slope based on these observations.

(c) What is the one-step-ahead forecast that Holt’s method gives for the number of park visitors in September?

Q4. Harold Grey owns a small farm in the Salinas Valley that grows apricots. The apricots are dried on the premises and sold to a number of large supermarket chains. Based on past experience and committed contracts, he estimates that sales over the next five years in thousands of packages will be as follows.

Assume that each worker stays on the job for at least one year and that Grey currently has three workers on the payroll. He estimates that he will have 20,000 packages on hand at the end of the current year. Assume that, on the average, each worker is paid $25,000 per year and is responsible for producing 30,000 packages. Inventory costs have been estimated to be 4 cents per package per year, and shortages are not allowed.

Based on the effort of interviewing and training new workers, Farmer Grey estimates that it costs $500 for each worker hired. Severance pay amounts to $1,000 per worker.

(a) Assuming that shortages are not allowed, determine the minimum constant workforce that he will need over the next five years.

(b) Evaluate the cost of the plan found in Part (a) (Hint. Including the total payroll cost).

(c) Formulate this as a linear program (Hint. The objective function is ).

(d) Solve the problem and round-off the solution and determine the cost of the resulting plan.

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