1. IE 214: Operations Management
KAMAL
Lecture 3
IE 214: Operations Management
Forecasting

3. EXERCISE 4.3
Solution:
a) There is no pattern of any kind

4. EXERCISE 4.3 Solution: Year 1 2 3 4 5 6 7 8 9 10 11 Frcast Demand 13 8 8 12  9  7
(b)
3-year moving
 7.7
11.3
(c)
3-year
weighted
6.4
 7.8
 9.6
10.9
12.2
10.5
10.6
8.4

5. EXERCISE 4.3
Solution:
d) The 3-year moving average method gives better results

7. EXERCISE 4.5 Solution: (381+368+374)/3 = 374.33
b) (381*0.1)+(368*0.3)+(374*0.6) = 372.9

8. EXERCISE 4.5
Solution:
c) Ft = F t-1 + α(At-1 – Ft-1) ; α = 0.2

10. EXERCISE 4.8
Given:

11. EXERCISE 4.8
Solution:
a) Ft = ( )/3 =

12. EXERCISE 4.8 89
b) Ft = (88+90)/2 = 89

13. EXERCISE 4.8
c) MAD = ∑|At-Ft|/n = 13.5/5 = 2.7

14. EXERCISE 4.8
d) MSE = ∑(At-Ft)^2/n = 66.75/5 = 13.35

15. EXERCISE 4.8
e) MAPE = (∑|At-Ft|/At)*100/n
= *100/5 = %

17. EXERCISE 4.19 Solution: Ft = F t-1 + α(At-1 – Ft-1)
F5 = F4 + α(A4 – F4) = *( ) = 49

18. HW
4.1
4.4
4.14
4.45

20. EXERCISE 4.20
Given:
α = 0.1 , ß = 0.2

21. Ft= α(At-1) + (1- α)(Ft-1 + Tt-1) Tt= ß(Ft - Ft-1) + (1- ß)*Tt-1
EXERCISE 4.20
Solution:
Ft= α(At-1) + (1- α)(Ft-1 + Tt-1)
Tt= ß(Ft - Ft-1) + (1- ß)*Tt-1
FIT = Ft + Tt

22. EXERCISE 4.20 Ft= 0.1*(70) + (0.9)(65 + 0) = 65.5
65.6
Ft= 0.1*(70) + (0.9)(65 + 0) = 65.5
Tt= 0.2( ) + (0.8)*0 = 0.1
FIT = = 65.6

23. EXERCISE 4.20

24. EXERCISE 4.21
MSE= ∑(Error^2)/n = 12.7

26. EXERCISE 4.26
Given:
a= y – b x
Y = a + b x = 5 + (20)(5) = 105 ^

27. EXERCISE 4.26
Solution:

28. EXERCISE 4.26
Solution:
b= (650)-(4)(2.5)(55)/[(30)-(4*(2.5^2))] = 100/5 = 20
a= 55 – (20*2.5) = 5
Y = a + b x = 5 + (20)(5) = 105 ^

29. HW
4.38
4.48

30. EXERCISE 4.30

31. EXERCISE 4.30 Given: 1000 radials produced each year.
Production planned to be 1200 radials next year.

32. EXERCISE 4.30
Solution:
1200 / 4 = 300 radials planned to be sold each season next year
300 * Is = Forecast for next year’s season

33. EXERCISE 4.30
Solution:

34. HW PROBLEMS
4.27
4.29