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CHP 7 Exerises Ans
CHP 7 Exerises Ans
KOMPWE Sdn Bhd is a large computer discount store that sells computers and printers in Kota Samarahan
where UNIMAS is located. It has collected historical data on computer sales and printer sales for the past 10
years as follows.
ANSWER
a) Develop a linear regression model relating the printer sales to computer sales.
= =
= =
Y=
b) Forecast the quantity of printers sold in 2017 if there are 950 computer sales.
Exercise 2
Employees at SDE company produce parts using precision machine tools according to exact specifications. The
quality control manager has checked the actual average times to produce this part for 10 different employees
during 20 days selected at random during the past month, and determined the corresponding percentage of
defective parts as follows;
ANSWER
a) Develop a linear regression model relating the percentage of defective to average time.
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Y=
b) Analyze if there is a strong relationship between percentage of defective and average time.
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[ 2 ( )2 ] [ 2 ( )2
Y=
Exercise 3
The following table shows the demand for product A at company KGH Sdn Bhd for year 2016.
a) Apply the three-month moving average to forecast the sales for the months of May through
December.
b) Apply the four-month moving average to forecast the sales for the months of May through December.
FMay = [DApril + DMarch + DFeb + DJan] / 4 = [31 + 27 + 24 + 20] / 4 = 25.5
FJune = [DMay + DApril + DMarch + DFeb] / 4 =
FJuly =
FAug =
FSept=
FOct=
FNov=
FDec=
c) The general manager is considering the above two methods for forecasting the demand in subsequent
months.
i. Compare the performance of the two methods by using the mean absolute deviation (MAD)
as the performance criterion. Which method would you recommend?
| |
MAD for 3 month moving average = =
8
| |
MAD for 4-months moving average = =
8
ii. Compare the performance of the two methods by using the mean absolute percent error
(MAPE) as the performance criterion. Which method would you recommend?
[| |/ ]100%
MAPE for 3 month moving average = =
8
[| |/ ]100%
MAPE for 4 month moving average = =
8
d) Using the method recommended based on the MAD criterion, forecast the demand for product A for
January 2017.
e) Using the method recommended based on the MAPE criterion, forecast the demand for product A for
January 2017.
Demand for product A at company KGH Sdn Bhd for year 2016 is shown in the following table.
a) Apply the three-month weighted moving average to forecast the sales for the months of May through
December. Use weights of (3/6), (2/6) and (1/6) , giving more weight to more recent data.
FJuly =
FAug =
FSept=
FOct=
FNov=
FDec=
Although forecast is needed in May through December, we still need to forecast for the month of April,
March and February. The initial forecast for January is given as 22.
Exponential smoothing
Month Demand in Forecast of Error (E ) = Absolute Error, (E/D)x100%
thousand (D) demand (F) D-F E
Jan 2016 20
Feb 24
March 27
April 31
May 37
June 47
July 53
A 62
S 54
O 36
N 32
D 29
Total
Average
c) The general manager is considering two methods for forecasting the demand in subsequent months.
i. Compare the performance of the two methods by using the mean absolute deviation (MAD)
as the performance criterion. Which method would you recommend?
| |
MAD for 3 month weighted moving average = =
8
| |
MAD for exponential smoothing = =
8
ii. (MAPE) as the performance criterion. Which method would you recommend?
[| |/ ]100%
MAPE for 3 month weighted moving average = =
8
[| |/ ]100%
MAPE for exponential smoothing = =
8
d) Using the method recommended based on the MAD criterion, forecast the demand for product A for
January 2017.
e) Using the method recommended based on the MSE criterion, forecast the demand for product A for
January 2017.