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    Module 5 - Forecasting

    Uploaded by

    Zakiah Abu Kasim
    The document provides historical sales data for fertilizer bags, air conditioners, and emergency calls to estimate future demand using different forecasting methods. It compares the accuracy of a 3-year moving average, weighted moving average, exponential smoothing, and seasonal indices to forecast sales of fertilizer bags, air conditioners, and emergency calls. The weighted moving average and exponential smoothing with a=0.6 provided more accurate forecasts than the other methods based on smaller errors and deviations from actual values.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    Module 5 - Forecasting

    Uploaded by

    Zakiah Abu Kasim
    5K views5 pages
    The document provides historical sales data for fertilizer bags, air conditioners, and emergency calls to estimate future demand using different forecasting methods. It compares the accuracy of a 3-year moving average, weighted moving average, exponential smoothing, and seasonal indices to forecast sales of fertilizer bags, air conditioners, and emergency calls. The weighted moving average and exponential smoothing with a=0.6 provided more accurate forecasts than the other methods based on smaller errors and deviations from actual values.

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    The document provides historical sales data for fertilizer bags, air conditioners, and emergency calls to estimate future demand using different forecasting methods. It compares the accuracy of a 3-year moving average, weighted moving average, exponential smoothing, and seasonal indices to forecast sales of fertilizer bags, air conditioners, and emergency calls. The weighted moving average and exponential smoothing with a=0.6 provided more accurate forecasts than the other methods based on smaller errors and deviations from actual values.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    5K views5 pages

    Module 5 - Forecasting

    Uploaded by

    Zakiah Abu Kasim
    The document provides historical sales data for fertilizer bags, air conditioners, and emergency calls to estimate future demand using different forecasting methods. It compares the accuracy of a 3-year moving average, weighted moving average, exponential smoothing, and seasonal indices to forecast sales of fertilizer bags, air conditioners, and emergency calls. The weighted moving average and exponential smoothing with a=0.6 provided more accurate forecasts than the other methods based on smaller errors and deviations from actual values.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 5

    5-15

    Data collected on the yearly demand for 50-pound


    bags 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?
    Year
    Demand
    for
    fertilizer
    (1,000s of bags)
    Weight
    Average
    FORECAST
    SALES
    ABSOLUTE VALUE OF
    ERRORS (DEVIATION).
    ACTUALFORECAST
    (Moving Average)
    1 4
    2 6
    3 4
    4 5 4.66666667 6 0.333333333
    5 10 5.000000 6.666666667 5
    6 8 6.33333333 9.666666667 1.666666667
    7 7 7.66666667 10.33333333 0.666666667
    8 9 8.33333333 10.66666667 0.666666667
    9 12 8.000000 11 4
    10 14 9.33333333 13.33333333 4.666666667
    11 15 11.6666667 16.33333333 3.333333333
    =
    Sum of |errors| 20.33333333
    The moving average with weight is the better than the three year moving average method
    because the error is less than 20.3
    ABS
    1
    3.33
    1.67
    3.33
    1.67
    1
    0.67
    1.33
    =
    14
    The moving average with weight is the better than the three year moving average method
    5-19
    Sales of Cool-Man air conditioners have grown
    steadily during the past 5 years:
    Year Sales Forecasts
    1 450 410
    2 495 422
    3 518 443.90
    4 563 466.13
    5 584 495.19
    6 ? 521.83
    The sales manager had predicted, before the business
    started, that year 1s sales would be 410 air conditioners.
    Using exponential smoothing with a
    weight of a= 0.30, develop forecasts for years 2
    through 6.
    5-27
    Emergency calls to Winter Park, Floridas 911 system,
    for the past 24 weeks are as follows:
    Week Calls
    The Exponentially
    Smoothed Forecast
    a= 0.1.
    Reforecast a
    = 0.6.
    1 50 50.00 50.00
    2 35 50.00 50.00
    3 25 48.50 41.00
    4 40 46.15 31.40
    5 45 45.54 36.56
    6 35 45.48 41.62
    7 20 44.43 37.65
    8 30 41.99 27.06
    9 35 40.79 28.82
    10 20 40.21 32.53
    11 15 38.19 25.01
    12 40 35.87 19.00
    13 55 36.28 31.60
    14 35 38.16 45.64
    15 25 37.84 39.26
    16 55 36.56 30.70
    17 55 38.40 45.28
    18 40 40.06 51.11
    19 35 40.05 44.44
    20 60 39.55 38.78
    21 75 41.59 51.51
    22 50 44.93 65.60
    23 40 45.44 56.24
    24 65 44.90 46.50
    25 85 46.91 57.60
    (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? The forecast for the 25th week is 46.91
    (b) Reforecast each period using a = 0.6.
    (c) Actual calls during the 25th week were 85.
    Which smoothing constant provides a superior
    forecast?
    The exponentially smoothed forecast of
    0.6 is the better superior forecast, because
    it is closer to the actual cost of 85.
    5-36
    In the past, Judy Holmess tire dealership sold an average
    of 1,000 radials each year. In the past two
    years, 200 and 250, respectively, were sold in fall,
    350 and 300 in winter, 150 and 165 in spring, and
    300 and 285 in summer. With a major expansion
    planned, Judy projects sales next year to increase to
    1,200 radials. What will the demand be each season?
    Quarters Year 1 Year 2
    Year
    1 & 2
    Average
    Average
    Season
    Demand
    Seasonal
    Index
    Average
    Demand
    for Next
    Year
    Year 3
    Demand
    Fall Quarter 200 250 225 250 0.9 300 270
    Winter Quarter 350 300 325 250 1.3 300 390
    Spring Quarter 150 165 157.5 250 0.63 300 189
    Summer Quarter 300 285 292.5 250 1.17 300 351

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