please complete Problems 5-1, 5-19, 5-25, 5-29, and 5-37, 5 PROBLEMS WITH SUBPARTS
5-1
1 Describe
iefly the steps used to develop a forecasting
system.
5-17 Data collected on the yearly demand for 50-pound
ags of fertilizer at Wallace Garden Supply are
shown in the following table. Develop a 3-year moving
average to forecast sales. Then estimate demand
again with a weighted moving average in which
sales in the most recent year are given a weight of 2
and sales in the other 2 years are each given a weight
of 1. Which method do you think is best?
5-17 Data collected on the yearly demand for 50-pound
ags of fertilizer at Wallace Garden Supply are
shown in the following table. Develop a 3-year moving
average to forecast sales. Then estimate demand
again with a weighted moving average in which
sales in the most recent year are given a weight of 2
and sales in the other 2 years are each given a weight
of 1. Which method do you think is best?
Yea
Demand for Fertilize
XXXXXXXXXX1,000s of Ba gs)
1 4
2 6
3 4
4 5
5 10
6 8
7 7
8 9
9 12
10 14
11 15
5-18 Develop a trend line for the demand for fertilizer in
Problem 5-17, using any computer software.
5-19 In Problems 5-17 and 5-18, three different forecasts
were developed for the demand for fertilizer.
These three forecasts are a 3-year moving average,
a weighted moving average, and a trend line. Which
one would you use? Explain your answer.
5-21 Sales of Cool-Man air conditioners have grown
steadily during the past 5 years:
Year Sales
1 450
2 495
3 518
4 563
5 584
6 ?
The sales manager had predicted, before the business
started, that year 1’s sales would be 410 air conditioners.
Using exponential smoothing with a weight
of a = 0.30, develop forecasts for years 2 through 6.
5-25 Using the trend projection method, develop a forecasting
model for the sales of Cool-Man air conditioners
(see Problem 5-21).
5-29 Emergency calls to Winter Park, Florida’s 911
system,
for the past 24 weeks are as follows:
Week Calls Week Calls Week Calls
1 50 9 35 17 55
2 35 10 20 18 40
3 25 11 15 19 35
4 40 12 40 20 60
5 45 13 55 21 75
6 35 14 35 22 50
7 20 15 25 23 40
8 30 16 55 24 65
(a) Compute the exponentially smoothed forecast of
calls for each week. Assume an initial forecast of
50 calls in the first week and use a = 0.1. What
is the forecast for the 25th week?
(b) Reforecast each period using a = 0.6.
(c) Actual calls during the 25th week were 85. Which
smoothing constant provides a superior forecast?
5-37 Management of Davis’s Department Store has used
time-series extrapolation to forecast retail sales
for the next four quarters. The sales estimates are
$100,000, $120,000, $140,000, and $160,000 fo
the respective quarters before adjusting for seasonality.
Seasonal indices for the four quarters have been found to be 1.30, 0.90, 0.70, and 1.10, respectively.
Compute a seasonalized or adjusted sales forecast.