1
Algoma University
School of Business and Economics
Dr. Ge
y Mahar
ADMN 2607: Management Science – Test Three
April 26, 2021
Time in test: 2 hours
There are 50 points in the test that is worth 25% of your term grade.
Select any combination of questions for the 50-point total.
Show Excel models for full credit.
Ge
yMaha
Ge
y Mahar - AU Dept of Business & Economics
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Q1. (25 points) Operations manager, Margaret O’Meagher, in Miramichi, N.B. is interested in determining
an optimal inventory policy at her Miramichi Valley Restaurant Ltd. (MVRL) for orders of frozen french
fries from McCain Foods in Florenceville, N.B. The number of pounds of french fries used by MVRL over
the past 15 weeks is as follows:
Week Pounds Week Pounds Week Pounds
1 16, XXXXXXXXXX, XXXXXXXXXX,300
2 15, XXXXXXXXXX, XXXXXXXXXX,800
3 18, XXXXXXXXXX, XXXXXXXXXX,200
4 17, XXXXXXXXXX, XXXXXXXXXX,700
5 16, XXXXXXXXXX, XXXXXXXXXX,200
a. Graph this time series.
. Verify statistically that the time series is stationary.
c. Using a three-week moving average, calculate the forecasted weekly demand for frozen McCain
french fries at MVRL for weeks 16 through 20.
d. Using a four-week moving average, calculate the forecasted demand for McCain frozen french
fries at the MVRL for weeks16 through 20.
e. Which moving average method gives the lower mean squared forecast e
or?
Suppose exponential smoothing is used to forecast weekly sales demand for McCain french
fries.
f. What is the forecast of weekly french fry sales demand for weeks 16 through 20 using a
smoothing constant at α =.10?
g. What is the forecast of the weekly french fry demand for weeks 16 through 20 using a smoothing
constant of α =.20?
h. Which of the two smoothing constants gives the lower mean squared forecast e
or?
i. Which of the two smoothing constants gives the lower mean absolute value of the forecasting
e
or?
j. Which of the two smoothing constants gives the lower mean absolute percent of the forecast
e
or?
k. Which of the two smoothing constants gives the lower largest deviation of the forecast e
or?
OPTIONAL BONUS PART OF QUESTION 1. (5 points)
Suppose exponential smoothing is used to forecast weekly sales demand for McCain french
fries for weeks 16 through 20. Use Solver to:
l. Determine the value of α that minimizes the mean squared forecast e
or.
m. Determine the value of α that minimizes the mean absolute value of the forecast e
or.
n. Determine the value of α that minimizes the mean.
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Q2. (15 points) Grand River Construction Company (GRCC) located in Brantford, Ontario has a
construction budget to build a new clubhouse for the Brantford Harlequins Rugby Club. GRCC uses
oth union and non-union workers. Levelling and grading of land, electrical wiring and plumbing work is
contracted out to union workers. The actual construction of the project, though supervised by union
carpenters, is performed by mainly non-union laborers (including volunteers) to reduce costs. Project
planning has produced the following chart.
a. Draw a PERT/CPM network for this problem.
. Prepare a chart showing the earliest/latest start and finish times and the slack for each
activity. What is the expected completion time for the rugby club project?
c. What is the impact of a delay of 1 day in the pouring of the concrete slab?
d. On Day 42, what is the priority of jobs? If there were some cross -trained electrician-
plumbers, what might be a good decision?
e. What is the impact of building the clubhouse 3 days early?
f. What is the priority of job at the start of the project? Why?
g. On Day 58, what is the priority of jobs? Why?
Q3. (10 points) A HOME LANDSCAPTING OPTION IN CAPE BRETON, NOVA SCOTIA
When buyers purchase new homes, they usually choose to do their own landscaping on their new
property. The PERT/CPM network shown in the figure below represents a landscaping project for a new
home in Cape Breton, Nova Scotia. The time is measured in days.
a. What are the expected completion time and the critical path for the landscaping project in Cape
Breton, N.S.?
. What are the earliest and latest start and finish times for activity C?
c. How long can activity A be delayed without delaying the minimum completion time of the project?
Immediate
Predecessors
Expected Completion
Time (Days)
A Grade land - 3
B Order building supplies - 4
C Hire nonunion labor - 7
D Pour concrete slab A 8
E Receive/organize supplies B 8
F Build clubhouse frame C, D, E 30
G Electrical installation F 15
H Plumbing installation F 11
I Stucco/paint exterior H 20
J Dry wall/paint interior G, H 18
K Finish/cleanup I, J 6
L Landscaping K 8
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d. If activities A, C, and F are each delayed three days, how long will the landscaping project be
delayed?
Q4. (15 points) The Ringtones, a gospel rock group that had many record hits in the 1970s, has evolved
and changed many musicians over the past decades. A group however is still singing and
performing at music concerts under that name and is now touring Canada. The Ringtones would
like to stop in Montreal, Quebec on its cu
ent tour schedule. A local music station, PQSR, is in
charge of making the a
angements to
ing the group to Montreal.
XXXXXXXXXXThe station has listed the following activities that must be completed prior to the music concert in
the table that follows. Time is measured in weeks.
Activity Immediate
Predecessors
Optimistic Most
Likely
Pessimistic
A. Negotiate lease/contract terms XXXXXXXXXX
B. Hire opening music acts A 2 4 12
C. Hire concert security B 1 2 3
D. Hire sound technicians B 2 3 10
E. Ticket sales outlets B 2 3 4
F. Initial sales promotion E 2 3 4
G. Hotel/travel a
angements A XXXXXXXXXX
H. Final sales promotion F 4 5 12
I. Concert rehearsals C, D, G 2 5 8
J. Concession sales A XXXXXXXXXX
a. Give an estimated completion time for this project. Show calculations.
. Which activities have the most slack?
c. What is the probability that the project will be completed in 12 weeks?
d. Give a time in which the station can be 99% sure of completing the project.
OPTIONAL BONUS PART OF QUESTION 4. (5 points)
A more experienced promotion manager promises completion of the project in about 16 days with
the following task timings:
Activity Immediate
Predecessors
Optimistic Most
Likely
Pessimistic
A. Negotiate lease/contract terms XXXXXXXXXX
B. Hire opening music acts A 2 4 6
C. Hire concert security B 1 2 3
D. Hire sound technicians B 2 3 6
E. Ticket sales outlets B 1 2 3
F. Initial sales promotion E 2 3 4
G. Hotel/travel a
angements A XXXXXXXXXX
H. Final sales promotion F 4 5 7
I. Concert rehearsals C, D, G 2 5 8
J. Concession sales A XXXXXXXXXX
e. On another model, show whether this is possible or not.
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Q5. (10 points) West End Honda Acura Motors offers their customers in good standing a choice of
several lease financing plans. The plan that will be the least expensive for a customer is contingent on
the anticipated number of kilometers driven over the first twelve (12) months of the lease. Meghan
O’Connor is trying to decide which lease plan to choose, and she therefore wishes to forecast the
number of miles she will drive the car over the lease term. She has reviewed her mileage