Question -6 : handy man Rentals

4-Weeks Moving Average 4-Weeks Moving Average

Week Rentals
(Actual) (Possible)
1 15
2 16
3 24
4 18
5 23
6 20 20.25 21
7 24 21.25 22
8 27 21.25 22
9 18 23.5 23
10 16 22.25 22
11 21.25 22
Mean absolute error

A. The forecast for week 11 is 21 rentals

B. The mean absolute deviation is 4.1 rentals
Absolute Error

0.25
2.75
5.75
5.5
6.25

4.1
Question-9: Computer Success
A. The three-month weighted moving average forecast and forecast error calculations

Actual Three-Month Weighted Moving Absolute Absolute

Month
Sales ($) Average Error Percentage Error
Jan 3000
Feb 3400
Mar 3700
Apr 4,100 3,500.00 600.00 14.63
May 4,700 3,862.50 837.50 17.82
Jun 5,700 4,350.00 1,350.00 23.68
Jul 6,300 5,125.00 1,175.00 18.65
Aug 7,200 5,875.00 1,325.00 18.40
Sep 6,400 6,675.00 275.00 4.30
Oct 4,600 6,687.50 2,087.50 45.38
Nov 4,200 5,600.00 1,400.00 33.33
Dec 3,900 4,625.00 725.00 18.59
Mean Absolute Deviation Error 1,086.11
Mean Absolute Percentage Error 21.64
Mean Absolute Squared Error

B. The exponential smoothing forecast (α=0.6) and forecast error calculations

Actual Exponetially smoothed forecast Absolute Absolute

Month
Sales ($) (α=0.6) Error Percentage Error

Jan 3000 3200

Feb 3400 3080.00
Mar 3700 3272.00
Apr 4,100 3528.80 571.20 13.93
May 4,700 3871.52 828.48 17.63
Jun 5,700 4368.61 1,331.39 23.36
Jul 6,300 5167.44 1,132.56 17.98
Aug 7,200 5846.98 1,353.02 18.79
Sep 6,400 6658.79 258.79 4.04
Oct 4,600 6503.52 1,903.52 41.38
Nov 4,200 5361.41 1,161.41 27.65
Dec 3,900 4664.56 764.56 19.60
Mean Absolute Deviation Error 1,033.88
Mean Absolute Percentage Error 20.49
Mean Absolute Squared Error
C. By comparing above two model, the mean absolute deviation
(MAD) of the exponential smoothing forecast is $1,033.88 and
the three-month weighted moving average forecast has a
somewhat greater MAD of $1,086.11. Thus, the exponential
smoothing method is recommended.

D. The mean absolute percent error (MAPE) for the exponential

smoothing forecast 20.49% and three-month weighted moving
average 21.64%. Hence exponential smoothing forecast is
reccomended.

E. In terms of mean squared error (MSE) the exponential

smoothing forecast MSE is $1,280,264.12 and three-month
weighted moving average forecast MSE is $1,437,673.61. Hence
exponential smoothing forecast is reccomended.
t error calculations

Squared Error

360,000.00
701,406.25
1,822,500.00
1,380,625.00
1,755,625.00
75,625.00
4,357,656.25
1,960,000.00
525,625.00

1,437,673.61

Squared Error
($)

326,269.44
686,379.11
1,772,604.66
1,282,684.91
1,830,670.48
66,972.74
3,623,374.55
1,348,865.16
584,556.00

1,280,264.12
Q-12 Heartville General Hospital
A. Exponential smoothing, α = 0.6

Year Demand Exponential Smoothing Absolute Error

1 45 45.00
2 50 45.00
3 52 48.00 4.00
4 56 50.40 5.60
5 58 53.76 4.24
Total 13.84
Average 4.61

B. Exponential smoothing, α = 0.9

Year Demand Exponential Smoothing Absolute Error

1 45 45.00
2 50 45.00
3 52 49.50 2.50
4 56 51.75 4.25
5 58 55.58 2.43
Total 9.17
Average 3.06

D. 2- Year Moving average

Year Demand 2-year moving average Absolute Error

1 45
2 50
3 52 47.50 4.50
4 56 51.00 5.00
5 58 54.00 4.00
Total 13.50
Average 4.50

E. 2- Year weighted Moving average (0.6 for recent year & 0.4 old)

2-year weighted moving

Year Demand Absolute Error
average
1 45
2 50
3 52 48.00 4.00
4 56 51.20 4.80
5 58 54.40 3.60
Total 12.40
Average 4.13

F,G &H- Comparison of models

Forecasted
MAD MAPE
methodology
Exponential
smoothing α = 0.6 4.61 8.33
Exponential
smoothing α = 0.9 3.06 5.53
Two-year moving
average 4.50 8.16

Two-year weighted
moving average 4.13 7.49

If MAD is the performance criteria then Exponential smoothing α = 0.9 method should be used
If MSE is the performance criteria then Exponential smoothing α = 0.9 method should be used
If MAPE is the performance criteria then Exponential smoothing α = 0.9 method should be used
Hence Exponential smoothing α = 0.9 works best in this case for all
performance criteria
 Absolute Squared
Percentage Error Error

7.69 16.00
10.00 31.36
7.31 17.98
25.00 65.34
8.33 21.78

Absolute Squared
Percentage Error Error

4.81 6.25
7.59 18.06
4.18 5.88
16.58 30.19
5.53 10.06

Absolute Squared
Percentage Error Error

8.65 20.25
8.93 25.00
6.90 16.00
24.48 61.25
8.16 20.42

ar & 0.4 old)

Absolute Squared
Percentage Error Error
 7.69 16.00
8.57 23.04
6.21 12.96
22.47 52.00
7.49 17.33

MSE

21.78

10.06

20.42

17.33

oothing α = 0.9 method should be used

oothing α = 0.9 method should be used
oothing α = 0.9 method should be used
ks best in this case for all
ia
Q-15 Forest and dan's boxes of chocolates
A. Estimated Quarterly demand for the fourth year

Quarter Forecast
1 3700
2 2700
3 1900
4 6500
Total 14800

B. Multiplicative seasonal method

Seasonal Seasonal Seasonal

Quarter Year 1 Year 2 Year 3
Factor Factor Factor
1 3,000 1.2 3,300 1.1 3502 1.03
2 1,700 0.68 2,100 0.7 2448 0.72
3 900 0.36 1,500 0.5 1768 0.52
4 4,400 1.76 5,100 1.7 5882 1.73
Total 10,000 12,000 13,600
Average 2,500 3,000 3,400

Forecast for year 4: 14,800, Average = 3,700.

Quarter Average Factor Forecast

1 3700 1.11 4107
2 3700 0.7 2590
3 3700 0.46 1702
4 3700 1.73 6401
Total 14800

This technique forecasts that the third-quarter sales will decrease compared to sales for the
third quarter of the third year. But thought it would increase. Mamma always said: “Life is
full of surprises!”
 Average Seasonal
Factor
1.11
0.7
0.46
1.73

se compared to sales for the

Mamma always said: “Life is
Q-16 Utility company in Texas
Seasonal Seasonal Seasonal
Quarter Year 1 Year 2 Year 3 Year 4
Factor Factor Factor
1.00 103.50 0.77 94.70 0.76 118.60 0.79 109.30
2.00 126.10 0.93 116.00 0.93 141.20 0.95 131.60
3.00 144.50 1.07 137.10 1.10 159.00 1.07 149.50
4.00 166.10 1.23 152.50 1.22 178.20 1.19 169.00
Totals 540.20 500.30 597.00 559.40
Averages 135.05 125.08 149.25 139.85

Forecast for year 5: 600, Average = 150

.
Quarter Average Factor Forecast
1 150.00 0.77 115.50
2 150.00 0.94 141.00
3 150.00 1.08 162.00
4 150.00 1.21 181.50
Total 600.00
Seasonal Average
Factor seasonal factor
0.78 0.77
0.94 0.94
1.07 1.08
1.21 1.21
 Q-18 Franklin Tooling Inc.
A. 1-Period Moving Average Forecasting results

Absolute
Demand for 1 Period Moving
Week Error Absolute Error Percentage
Component Average Forecast
Error
1 137
2 136 137
3 143 136
4 136 143
5 141 136 5 5 3.5461
6 128 141 -13 13 10.1563
7 149 128 21 21 14.0940
8 136 149 -13 13 9.5588
9 134 136 -2 2 1.4925
10 142 134 8 8 5.6338
11 125 142 -17 17 13.6000
12 134 125 9 9 6.7164
13 118 134 -16 16 13.5593
14 131 118 13 13 9.9237
15 132 131 1 1 0.7576
16 124 132 -8 8 6.4516
17 121 124 -3 3 2.4793
18 127 121 6 6 4.7244
19 118 127 -9 9 7.6271
20 120 118 2 2 1.6667
21 115 120 -5 5 4.3478
22 106 115 -9 9 8.4906
23 120 106 14 14 11.6667
24 113 120 -7 7 6.1947
25 121 113 8 8 6.6116
26 119 121 -2 2 1.6807
Forecast 119
CFE -17.0000
MAD 8.6818
MAPE 6.8627
MSE

B. 3-Period Moving Average Forecasting results

Demand for 3 Period Moving Absolute

Week Error Absolute Error Percentage
Component Average Forecast
Error
1 137
 2 136
3 143
4 136
5 141 138.3333 2.6667 2.6667 1.8913
6 128 140.0000 -12.0000 12.0000 9.3750
7 149 135.0000 14.0000 14.0000 9.3960
8 136 139.3333 -3.3333 3.3333 2.4510
9 134 137.6667 -3.6667 3.6667 2.7363
10 142 139.6667 2.3333 2.3333 1.6432
11 125 137.3333 -12.3333 12.3333 9.8667
12 134 133.6667 0.3333 0.3333 0.2488
13 118 133.6667 -15.6667 15.6667 13.2768
14 131 125.6667 5.3333 5.3333 4.0712
15 132 127.6667 4.3333 4.3333 3.2828
16 124 127.0000 -3.0000 3.0000 2.4194
17 121 129.0000 -8.0000 8.0000 6.6116
18 127 125.6667 1.3333 1.3333 1.0499
19 118 124.0000 -6.0000 6.0000 5.0847
20 120 122.0000 -2.0000 2.0000 1.6667
21 115 121.6667 -6.6667 6.6667 5.7971
22 106 117.6667 -11.6667 11.6667 11.0063
23 120 113.6667 6.3333 6.3333 5.2778
24 113 113.6667 -0.6667 0.6667 0.5900
25 121 113.0000 8.0000 8.0000 6.6116
26 119 118.0000 1.0000 1.0000 0.8403
Forecast 117.6667
CFE -39.3333
MAD 5.9394
MAPE 4.7816
MSE

C. Exponentially smoothed forecast (α=0.28) Forecasting results

Exponetially Absolute
Demand for
Week smoothed forecast Error Absolute Error Percentage
Component
(α=0.28) Error
1 137 136.0000
2 136 136.2800
3 143 136.2016
4 136 138.1052
5 141 137.5157 3.4843 3.4843 2.4711
6 128 138.4913 -10.4913 10.4913 8.1963
7 149 135.5537 13.4463 13.4463 9.0243
8 136 139.3187 -3.3187 3.3187 2.4402
9 134 138.3895 -4.3895 4.3895 3.2757
 10 142 137.1604 4.8396 4.8396 3.4082
11 125 138.5155 -13.5155 13.5155 10.8124
12 134 134.7312 -0.7312 0.7312 0.5456
13 118 134.5264 -16.5264 16.5264 14.0055
14 131 129.8990 1.1010 1.1010 0.8404
15 132 130.2073 1.7927 1.7927 1.3581
16 124 130.7093 -6.7093 6.7093 5.4107
17 121 128.8307 -7.8307 7.8307 6.4716
18 127 126.6381 0.3619 0.3619 0.2850
19 118 126.7394 -8.7394 8.7394 7.4063
20 120 124.2924 -4.2924 4.2924 3.5770
21 115 123.0905 -8.0905 8.0905 7.0352
22 106 120.8252 -14.8252 14.8252 13.9860
23 120 116.6741 3.3259 3.3259 2.7716
24 113 117.6054 -4.6054 4.6054 4.0755
25 121 116.3159 4.6841 4.6841 3.8712
26 119 117.6274 1.3726 1.3726 1.1534
Forecast 118.0117
CFE -69.6570
MAD 6.2943
MAPE 5.1101
MSE

E. Performance comparison

Forecasted CFE MAD MAPE MSE

methodology

1 period moving
average -17.00 8.68 6.86 103.68

3-Period moving
average -39.33 5.94 4.78 55.59

Exponential
smoothing α =
0.28 -69.65 6.29 5.11 61.82

As seen in the summary table, the 3- Period moving average method provides superior
results across all performance criteria.
If MAD is the performance criteria then 3- Period moving average method should be used
If MAPE is the performance criteria then 3- Period moving average method should be used
If MSE is the performance criteria then 3- Period moving average method should be used
If CFE is the performance criteria then 1-Period moving average method should be used
Squared Error

25
169
441
169
4
64
289
81
256
169
1
64
9
36
81
4
25
81
196
49
64
4

103.6818

Squared Error
 7.1111
144.0000
196.0000
11.1111
13.4444
5.4444
152.1111
0.1111
245.4444
28.4444
18.7778
9.0000
64.0000
1.7778
36.0000
4.0000
44.4444
136.1111
40.1111
0.4444
64.0000
1.0000

55.5859

Squared Error

12.1403
110.0676
180.8018
11.0137
19.2674
 23.4216
182.6686
0.5346
273.1230
1.2121
3.2138
45.0141
61.3193
0.1310
76.3774
18.4245
65.4564
219.7857
11.0615
21.2094
21.9411
1.8840

61.8213

ge method should be used

ge method should be used
ge method should be used
e method should be used
Q-20- Large Public Library
To decide the moving average forcast model we need to have minimum MAD & CFE

Months Demand n=1 n=2 n=3 n=4

1 1,847
2 2,669 1,847
3 2,467 2,669 2258
4 2,432 2,467 2568 2328
5 2,464 2,432 2450 2523 2354
6 2,378 2,464 2448 2454 2508
7 2,217 2,378 2421 2425 2435
8 2,445 2,217 2298 2353 2373
9 1,894 2,445 2331 2347 2376
10 1,922 1,894 2170 2185 2234
11 2,431 1,922 1908 2087 2120
12 2,274 2,431 2177 2082 2173
13 2,045 2,274 2353 2209 2130
14 2,321 2,045 2160 2250 2168
15 2,419 2,321 2183 2213 2268
16 2,088 2,419 2370 2262 2265
17 2,667 2,088 2254 2276 2218
18 2,122 2,667 2378 2391 2374
19 2,206 2,122 2395 2292 2324
20 1,869 2,206 2164 2332 2271
21 2,441 1,869 2038 2066 2216
22 2,291 2,441 2155 2172 2160
23 2,364 2,291 2366 2200 2202
24 2,189 2,364 2328 2365 2241
25 1,986 2,189 2277 2281 2321
26 2,564 1,986 2088 2180 2208
27 2,635 2,564 2275 2246 2276
28 2,150 2,635 2600 2395 2344
29 2,201 2,150 2393 2450 2334
30 2,663 2,201 2176 2329 2388
31 2,055 2,663 2432 2338 2412
32 1,678 2,055 2359 2306 2267
33 1,845 1,678 1867 2132 2149
34 2,065 1,845 1762 1859 2060
35 2,147 2,065 1955 1863 1911
36 2,451 2,147 2106 2019 1934
In general, as n increa
average seems to be a
Forcast MAD
n=5 n=6 n=7 n=8 n=9 n=10 n=1 n=2 n=3 n=4

822
202 209
35 136 104
32 15 59 110
2376 86 70 76 130
2482 2376 161 204 208 218
2392 2438 2353 228 148 92 72
2387 2401 2439 2365 551 437 453 482
2280 2305 2328 2371 2313 28 248 263 312
2171 2220 2250 2277 2321 2274 509 523 344 312
2182 2215 2250 2273 2294 2332 157 98 192 101
2193 2197 2223 2253 2273 2292 229 308 164 85
2113 2169 2175 2201 2230 2250 276 162 71 153
2199 2148 2190 2194 2214 2239 98 236 206 151
2298 2235 2187 2219 2219 2235 331 282 174 177
2229 2263 2214 2174 2204 2206 579 414 391 449
2308 2302 2321 2271 2229 2251 545 256 269 252
2323 2277 2277 2296 2254 2218 84 189 86 118
2300 2304 2267 2268 2286 2250 337 295 463 402
2190 2229 2242 2217 2223 2244 572 404 375 225
2261 2232 2259 2267 2242 2245 150 136 119 132
2186 2266 2241 2263 2269 2247 73 2 164 162
2234 2216 2280 2256 2274 2279 175 139 176 52
2231 2227 2212 2269 2249 2266 203 291 295 335
2254 2190 2192 2184 2237 2222 578 477 384 357
2279 2306 2243 2239 2226 2270 71 360 389 359
2348 2338 2353 2292 2283 2267 485 450 245 194
2305 2315 2311 2328 2277 2270 51 192 249 133
2307 2288 2298 2298 2313 2269 462 488 334 276
2443 2367 2341 2344 2338 2348 608 377 283 357
2341 2378 2322 2305 2312 2310 377 681 628 589
2149 2230 2278 2242 2236 2249 167 22 287 304
2088 2099 2175 2224 2197 2197 220 304 206 5
2061 2085 2094 2162 2206 2184 82 192 284 236
1958 2076 2093 2101 2160 2200 304 345 432 517
282 267 257 242
In general, as n increases, MAD decreases and CFE (bias) increases. The 10-month
average seems to be a good combination of relatively low MAD and low CFE.
 MAD
n=5 n=6 n=7 n=8 n=9 n=10 n=1 n=2 n=3 n=4

822
-202 209
-35 -136 104
32 15 -59 110
2 -86 -70 -76 -130
265 159 -161 -204 -208 -218
53 7 92 228 148 92 72
493 507 545 471 -551 -437 -453 -482
358 383 406 449 391 28 -248 -263 -312
260 211 181 154 110 158 509 523 344 312
92 60 24 1 20 58 -157 98 192 101
148 152 178 208 228 247 -229 -308 -164 -85
208 153 146 120 91 71 276 162 71 153
220 271 229 225 205 180 98 236 206 151
210 147 99 131 131 147 -331 -282 -174 -177
438 404 453 493 463 461 579 414 391 449
186 180 199 149 107 129 -545 -256 -269 -252
117 71 71 90 48 12 84 -189 -86 -118
431 435 398 399 417 381 -337 -295 -463 -402
251 213 199 224 218 197 572 404 375 225
30 59 32 24 49 46 -150 136 119 132
178 98 123 101 95 117 73 -2 164 162
45 27 91 67 85 90 -175 -139 -176 -52
245 241 226 283 263 280 -203 -291 -295 -335
310 374 372 381 327 342 578 477 384 357
356 329 392 396 409 365 71 360 389 359
198 188 203 142 133 117 -485 -450 -245 -194
104 114 110 127 76 69 51 -192 -249 -133
356 376 365 366 350 394 462 488 334 276
388 312 286 289 283 293 -608 -377 -283 -357
663 700 644 627 634 632 -377 -681 -628 -589
304 385 433 397 391 404 167 -22 -287 -304
23 34 110 159 132 132 220 304 206 5
86 63 53 15 59 37 82 192 284 236
493 376 358 351 291 251 304 345 432 517
242 234 242 244 222 216 604 -68 -291 -524
 CFE
n=5 n=6 n=7 n=8 n=9 n=10

2
-265 -159
53 7 92
-493 -507 -545 -471
-358 -383 -406 -449 -391
260 211 181 154 110 158
92 60 24 1 -20 -58
-148 -152 -178 -208 -228 -247
208 153 146 120 91 71
220 271 229 225 205 180
-210 -147 -99 -131 -131 -147
438 404 453 493 463 461
-186 -180 -199 -149 -107 -129
-117 -71 -71 -90 -48 -12
-431 -435 -398 -399 -417 -381
251 213 199 224 218 197
30 59 32 24 49 46
178 98 123 101 95 117
-45 -27 -91 -67 -85 -90
-245 -241 -226 -283 -263 -280
310 374 372 381 327 342
356 329 392 396 409 365
-198 -188 -203 -142 -133 -117
-104 -114 -110 -127 -76 -69
356 376 365 366 350 394
-388 -312 -286 -289 -283 -293
-663 -700 -644 -627 -634 -632
-304 -385 -433 -397 -391 -404
-23 -34 -110 -159 -132 -132
86 63 53 -15 -59 -37
493 376 358 351 291 251
-846 -1,043 -981 -1,166 -791 -445
Q-21- Large Public Library (Cont to 20)

Months Demand α=0.1 α=0.2 α=0.3 α=0.4 α=0.5

1 1,847 1847 1847 1847 1847 1847
2 2,669 1,847 1,847 1,847 1,847 1,847
3 2,467 1,929 2,011 2,094 2,176 2,258
4 2,432 1,983 2,103 2,206 2,292 2,363
5 2,464 2,028 2,168 2,274 2,348 2,397
6 2,378 2,071 2,228 2,331 2,395 2,431
7 2,217 2,102 2,258 2,345 2,388 2,404
8 2,445 2,114 2,250 2,307 2,320 2,311
9 1,894 2,147 2,289 2,348 2,370 2,378
10 1,922 2,121 2,210 2,212 2,179 2,136
11 2,431 2,102 2,152 2,125 2,076 2,029
12 2,274 2,134 2,208 2,217 2,218 2,230
13 2,045 2,148 2,221 2,234 2,241 2,252
14 2,321 2,138 2,186 2,177 2,162 2,148
15 2,419 2,156 2,213 2,220 2,226 2,235
16 2,088 2,183 2,254 2,280 2,303 2,327
17 2,667 2,173 2,221 2,222 2,217 2,207
18 2,122 2,223 2,310 2,356 2,397 2,437
19 2,206 2,213 2,273 2,286 2,287 2,280
20 1,869 2,212 2,259 2,262 2,255 2,243
21 2,441 2,178 2,181 2,144 2,100 2,056
22 2,291 2,204 2,233 2,233 2,237 2,248
23 2,364 2,213 2,245 2,250 2,258 2,270
24 2,189 2,228 2,269 2,285 2,301 2,317
25 1,986 2,224 2,253 2,256 2,256 2,253
26 2,564 2,200 2,199 2,175 2,148 2,119
27 2,635 2,236 2,272 2,292 2,314 2,342
28 2,150 2,276 2,345 2,395 2,443 2,488
29 2,201 2,264 2,306 2,321 2,326 2,319
30 2,663 2,257 2,285 2,285 2,276 2,260
31 2,055 2,298 2,361 2,399 2,431 2,462
32 1,678 2,274 2,299 2,295 2,280 2,258
33 1,845 2,214 2,175 2,110 2,039 1,968
34 2,065 2,177 2,109 2,031 1,962 1,907
35 2,147 2,166 2,100 2,041 2,003 1,986
36 2,451 2,164 2,110 2,073 2,061 2,066

As α increases, CFE (bias) generally decreases and M

generally increases. When α = 0.7 there seems to be a
combination of low bias and low MAD.
 MAD
α=0.6 α=0.7 α=0.8 α=0.9 α=1.0 α=0.1 α=0.2 α=0.3 α=0.4 α=0.5
1847 1847 1847 1847 1847
1,847 1,847 1,847 1,847 1,847 822 822 822 822 822
2,340 2,422 2,505 2,587 2,669 538 456 373 291 209
2,416 2,454 2,475 2,479 2,467 449 329 226 140 70
2,426 2,438 2,441 2,437 2,432 436 296 190 116 67
2,449 2,456 2,459 2,461 2,464 307 150 47 17 53
2,406 2,402 2,394 2,386 2,378 115 41 128 171 187
2,293 2,272 2,252 2,234 2,217 331 195 138 125 134
2,384 2,393 2,406 2,424 2,445 253 395 454 476 484
2,090 2,044 1,996 1,947 1,894 199 288 290 257 214
1,989 1,959 1,937 1,924 1,922 329 279 306 355 402
2,254 2,289 2,332 2,380 2,431 140 66 57 56 44
2,266 2,279 2,286 2,285 2,274 103 176 189 196 207
2,133 2,115 2,093 2,069 2,045 183 135 144 159 173
2,246 2,259 2,275 2,296 2,321 263 206 199 193 184
2,350 2,371 2,390 2,407 2,419 95 166 192 215 239
2,193 2,173 2,148 2,120 2,088 494 446 445 450 460
2,477 2,519 2,563 2,612 2,667 101 188 234 275 315
2,264 2,241 2,210 2,171 2,122 7 67 80 81 74
2,229 2,217 2,207 2,203 2,206 343 390 393 386 374
2,013 1,973 1,937 1,902 1,869 263 260 297 341 385
2,270 2,301 2,340 2,387 2,441 87 58 58 54 43
2,283 2,294 2,301 2,301 2,291 151 119 114 106 94
2,331 2,343 2,351 2,358 2,364 39 80 96 112 128
2,246 2,235 2,221 2,206 2,189 238 267 270 270 267
2,090 2,061 2,033 2,008 1,986 364 365 389 416 445
2,374 2,413 2,458 2,508 2,564 399 363 343 321 293
2,531 2,568 2,600 2,622 2,635 126 195 245 293 338
2,302 2,276 2,240 2,197 2,150 63 105 120 125 118
2,242 2,223 2,209 2,201 2,201 406 378 378 387 403
2,494 2,531 2,572 2,617 2,663 243 306 344 376 407
2,231 2,198 2,158 2,111 2,055 596 621 617 602 580
1,899 1,834 1,774 1,721 1,678 369 330 265 194 123
1,867 1,842 1,831 1,833 1,845 112 44 34 103 158
1,986 1,998 2,018 2,042 2,065 19 47 106 144 161
2,082 2,102 2,121 2,136 2,147 287 341 378 390 385
265 256 256 258 258

enerally decreases and MAD

= 0.7 there seems to be a good
w bias and low MAD.
MAD CFE
α=0.6 α=0.7 α=0.8 α=0.9 α=1.0 α=0.1 α=0.2 α=0.3 α=0.4 α=0.5

822 822 822 822 822 822 822 822 822 822
127 45 38 120 202 538 456 373 291 209
16 22 43 47 35 449 329 226 140 70
38 26 23 27 32 436 296 190 116 67
71 78 81 83 86 307 150 47 -17 -53
189 185 177 169 161 115 -41 -128 -171 -187
152 173 193 211 228 331 195 138 125 134
490 499 512 530 551 -253 -395 -454 -476 -484
168 122 74 25 28 -199 -288 -290 -257 -214
442 472 494 507 509 329 279 306 355 402
20 15 58 106 157 140 66 57 56 44
221 234 241 240 229 -103 -176 -189 -196 -207
188 206 228 252 276 183 135 144 159 173
173 160 144 123 98 263 206 199 193 184
262 283 302 319 331 -95 -166 -192 -215 -239
474 494 519 547 579 494 446 445 450 460
355 397 441 490 545 -101 -188 -234 -275 -315
58 35 4 35 84 -7 -67 -80 -81 -74
360 348 338 334 337 -343 -390 -393 -386 -374
428 468 504 539 572 263 260 297 341 385
21 10 49 96 150 87 58 58 54 43
81 70 63 63 73 151 119 114 106 94
142 154 162 169 175 -39 -80 -96 -112 -128
260 249 235 220 203 -238 -267 -270 -270 -267
474 503 531 556 578 364 365 389 416 445
261 222 177 127 71 399 363 343 321 293
381 418 450 472 485 -126 -195 -245 -293 -338
101 75 39 4 51 -63 -105 -120 -125 -118
421 440 454 462 462 406 378 378 387 403
439 476 517 562 608 -243 -306 -344 -376 -407
553 520 480 433 377 -596 -621 -617 -602 -580
54 11 71 124 167 -369 -330 -265 -194 -123
198 223 234 232 220 -112 -44 34 103 158
161 149 129 105 82 -19 47 106 144 161
369 349 330 315 304 287 341 378 390 385
256 256 262 270 282 3,458 1,654 1,131 924 823
CFE
α=0.6 α=0.7 α=0.8 α=0.9 α=1.0

822 822 822 822 822

127 45 -38 -120 -202
16 -22 -43 -47 -35
38 26 23 27 32
-71 -78 -81 -83 -86
-189 -185 -177 -169 -161
152 173 193 211 228
-490 -499 -512 -530 -551
-168 -122 -74 -25 28
442 472 494 507 509
20 -15 -58 -106 -157
-221 -234 -241 -240 -229
188 206 228 252 276
173 160 144 123 98
-262 -283 -302 -319 -331
474 494 519 547 579
-355 -397 -441 -490 -545
-58 -35 -4 35 84
-360 -348 -338 -334 -337
428 468 504 539 572
21 -10 -49 -96 -150
81 70 63 63 73
-142 -154 -162 -169 -175
-260 -249 -235 -220 -203
474 503 531 556 578
261 222 177 127 71
-381 -418 -450 -472 -485
-101 -75 -39 4 51
421 440 454 462 462
-439 -476 -517 -562 -608
-553 -520 -480 -433 -377
-54 11 71 124 167
198 223 234 232 220
161 149 129 105 82
369 349 330 315 304
761 713 673 636 604
 Q-26 Air Pollution Visibility
26 (A)
1-Period Moving Average Forecasting results

Date Year 2 Error Absolute Error

22-July 130
23-July 120 130
24-July 125 120 5 5
25-July 160 125 35 35
26-July 165 160 5 5
27-July 205 165 40 40
28-July 165 205 -40 40
29-July 125 165 -40 40
30-July 85 125 -40 40
31-July 105 85 20 20
1-August 160 105 55 55
2-August 125 160 -35 35
3-August 130 125 5 5
4-August 205 130 75 75
5-August 200 205 -5 5
6-August 110 200 -90 90
7-August 100 110 -10 10
8-August 200 100 100 100
9-August 160 200 -40 40
10-August 100 160 -60 60
11-August 55 100 -45 45
12-August 130 55 75 75
13-August 75 130 -55 55
14-August 30 75 -45 45
15-August 100 30 70 70
16-August 85 100 -15 15
17-August 150 85 65 65
18-August 220 150 70 70
19-August 160 220 -60 60
20-August 165 160 5 5
21-August 135 165 -30 30
22-August 80 135 -55 55
23-August 100 80 20 20
24-August 200 100 100 100
25-August 100 200 -100 100
26-August 110 100 10 10
27-August 50 110 -60 60
28-August 135 50 85 85
29-August 70 135 -65 65
30-August 105 70 35 35
31- August 105
CFE -15
MAD 46.4473684211
MAPE
MSE

3-Period Moving Average Forecasting results

3 Period Moving
Week Year 2 Error Absolute Error
Average Forecast

22-July 130
23-July 120
24-July 125
25-July 160 125 35 35
26-July 165 135 30 30
27-July 205 150 55 55
28-July 165 176.666666666667 -11.66666667 11.66666666667
29-July 125 178.333333333333 -53.33333333 53.33333333333
30-July 85 165 -80 80
31-July 105 125 -20 20
1-August 160 105 55 55
2-August 125 116.666666666667 8.3333333333 8.333333333333
3-August 130 130 0 0
4-August 205 138.333333333333 66.666666667 66.66666666667
5-August 200 153.333333333333 46.666666667 46.66666666667
6-August 110 178.333333333333 -68.33333333 68.33333333333
7-August 100 171.666666666667 -71.66666667 71.66666666667
8-August 200 136.666666666667 63.333333333 63.33333333333
9-August 160 136.666666666667 23.333333333 23.33333333333
10-August 100 153.333333333333 -53.33333333 53.33333333333
11-August 55 153.333333333333 -98.33333333 98.33333333333
12-August 130 105 25 25
13-August 75 95 -20 20
14-August 30 86.6666666666667 -56.66666667 56.66666666667
15-August 100 78.3333333333333 21.666666667 21.66666666667
16-August 85 68.3333333333333 16.666666667 16.66666666667
17-August 150 71.6666666666667 78.333333333 78.33333333333
18-August 220 111.666666666667 108.33333333 108.3333333333
19-August 160 151.666666666667 8.3333333333 8.333333333333
20-August 165 176.666666666667 -11.66666667 11.66666666667
 21-August 135 181.666666666667 -46.66666667 46.66666666667
22-August 80 153.333333333333 -73.33333333 73.33333333333
23-August 100 126.666666666667 -26.66666667 26.66666666667
24-August 200 105 95 95
25-August 100 126.666666666667 -26.66666667 26.66666666667
26-August 110 133.333333333333 -23.33333333 23.33333333333
27-August 50 136.666666666667 -86.66666667 86.66666666667
28-August 135 86.6666666666667 48.333333333 48.33333333333
29-August 70 98.3333333333333 -28.33333333 28.33333333333
30-August 105 85 20 20
31- August 103.333333333333
CFE -51.66666667
MAD 44.9099099099
MAPE
MSE

Exponentially smoothed forecast (α=0.3) Forecasting results

Exponetially
Week Year 2 smoothed forecast Error Absolute Error
(α=0.3)
22-July 130 130
23-July 120 130
24-July 125 127 -2 2
25-July 160 126.4 33.6 33.6
26-July 165 136.48 28.52 28.52
27-July 205 145.036 59.964 59.964
28-July 165 163.0252 1.9748 1.9748
29-July 125 163.61764 -38.61764 38.61764
30-July 85 152.032348 -67.032348 67.032348
31-July 105 131.9226436 -26.9226436 26.9226436
1-August 160 123.84585052 36.15414948 36.15414948
2-August 125 134.692095364 -9.692095364 9.692095364
3-August 130 131.7844667548 -1.784466755 1.7844667548
4-August 205 131.24912672836 73.750873272 73.75087327164
5-August 200 153.374388709852 46.62561129 46.62561129015
6-August 110 167.362072096896 -57.3620721 57.3620720969
7-August 100 150.153450467828 -50.15345047 50.15345046783
8-August 200 135.107415327479 64.892584673 64.89258467252
9-August 160 154.575190729236 5.4248092708 5.424809270764
10-August 100 156.202633510465 -56.20263351 56.20263351046
11-August 55 139.341843457325 -84.34184346 84.34184345733
12-August 130 114.039290420128 15.96070958 15.96070957987
13-August 75 118.827503294089 -43.82750329 43.82750329409
14-August 30 105.679252305863 -75.67925231 75.67925230586
15-August 100 82.9754766141039 17.024523386 17.0245233859
16-August 85 88.0828336298727 -3.08283363 3.082833629873
17-August 150 87.1579835409109 62.842016459 62.84201645909
18-August 220 106.010588478638 113.98941152 113.9894115214
19-August 160 140.207411935046 19.792588065 19.79258806495
20-August 165 146.145188354532 18.854811645 18.85481164547
21-August 135 151.801631848173 -16.80163185 16.80163184817
22-August 80 146.761142293721 -66.76114229 66.76114229372
23-August 100 126.732799605605 -26.73279961 26.7327996056
24-August 200 118.712959723923 81.287040276 81.28704027608
25-August 100 143.099071806746 -43.09907181 43.09907180675
26-August 110 130.169350264722 -20.16935026 20.16935026472
27-August 50 124.118545185306 -74.11854519 74.11854518531
28-August 135 101.882981629714 33.11701837 33.11701837029
29-August 70 111.8180871408 -41.81808714 41.8180871408
30-August 105 99.2726609985599 5.7273390014 5.72733900144
31- August 100.990862698992
CFE -86.69712434
MAD 40.1500446557
MAPE
MSE

Performance comparison

Forecasted CFE MAD MAPE

methodology

1 period moving
average -15.00 46.45 43.38

3-Period moving
average -51.67 44.91 44.48

Exponential
smoothing α = 0.3 -86.70 40.15 41.26

As seen in the summary table, the Exponential smoothing α = 0.3 method provides
superior results across all performance criteria.
If MAD is the performance criteria then Exponential smoothing α = 0.3 method should
If MAPE is the performance criteria then Exponential smoothing α = 0.3 method should
If MSE is the performance criteria then Exponential smoothing α = 0.3 method should
If CFE is the performance criteria then 1-Period moving average method should be
 26 (B)
There is no reason to support expectations for air quality in the third year to be any
different from that of the first two years. It will average about 101 unless public policy
affects transportation, population growth, or utilities burning natural gas rather than
coal. That might make a detectable difference in air quality. However, the effects of
public policy are not recorded in the database. so qualitative forecasting methods are
needed.
Absolute
Percentage Squared Error Year 1
Error
125
100
4.0000 25 40
21.8750 1225 100
3.0303 25 185
19.5122 1600 85
24.2424 1600 95
32.0000 1600 200
47.0588 1600 125
19.0476 400 90
34.3750 3025 85
28.0000 1225 135
3.8462 25 175
36.5854 5625 200
2.5000 25 105
81.8182 8100 205
10.0000 100 90
50.0000 10000 45
25.0000 1600 100
60.0000 3600 120
81.8182 2025 85
57.6923 5625 125
73.3333 3025 165
150.0000 2025 60
70.0000 4900 65
17.6471 225 110
43.3333 4225 210
31.8182 4900 110
37.5000 3600 170
3.0303 25 125
22.2222 900 85
68.7500 3025 45
20.0000 400 95
50.0000 10000 85
100.0000 10000 160
9.0909 100 105
 120.0000 3600 100
62.9630 7225 95
92.8571 4225 50
33.3333 1225 60

43.375798337
2965.13157895

Absolute
Percentage Squared Error
Error

21.8750 1225
18.1818 900
26.8293 3025
7.0707 136.111111111
42.6667 2844.44444444
94.1176 6400
19.0476 400
34.3750 3025
6.6667 69.4444444444
0.0000 0
32.5203 4444.44444444
23.3333 2177.77777778
62.1212 4669.44444444
71.6667 5136.11111111
31.6667 4011.11111111
14.5833 544.444444444
53.3333 2844.44444444
178.7879 9669.44444444
19.2308 625
26.6667 400
188.8889 3211.11111111
21.6667 469.444444444
19.6078 277.777777778
52.2222 6136.11111111
49.2424 11736.1111111
5.2083 69.4444444444
7.0707 136.111111111
 34.5679 2177.77777778
91.6667 5377.77777778
26.6667 711.111111111
47.5000 9025
26.6667 711.111111111
21.2121 544.444444444
173.3333 7511.11111111
35.8025 2336.11111111
40.4762 802.777777778
19.0476 400

44.4753323873
2815.69069069

esults

Absolute
Percentage Squared Error
Error

1.6000 4
21.0000 1128.96
17.2848 813.3904
29.2507 3595.681296
1.1968 3.89983504
30.8941 1491.32211917
78.8616 4493.33567839
25.6406 724.828738413
22.5963 1307.12252462
7.7537 93.9367125449
1.3727 3.18432159899
35.9760 5439.19130833
23.3128 2173.94762818
52.1473 3290.40731525
50.1535 2515.36859383
32.4463 4211.04754548
3.3905 29.4285556242
56.2026 3158.73601351
153.3488 7113.54655778
12.2775 254.744250293
58.4367 1920.85004499
252.2642 5727.34922957
 17.0245 289.834396517
3.6269 9.50386318947
41.8947 3949.11903264
51.8134 12993.585939
12.3704 391.746542309
11.4272 355.503922186
12.4457 282.294832762
83.4514 4457.05012036
26.7328 714.642574753
40.6435 6607.58291684
43.0991 1857.5299906
18.3358 406.802690101
148.2371 5493.55874039
24.5311 1096.73690574
59.7401 1748.75241212
5.4546 32.8024120374

41.2693621367
2373.19278843

MSE

2965.00

2816.00

2373.19

g α = 0.3 method provides

criteria.
tial smoothing α = 0.3 method should be used
tial smoothing α = 0.3 method should be used
tial smoothing α = 0.3 method should be used
d moving average method should be used
 the third year to be any
out 101 unless public policy
ng natural gas rather than
. However, the effects of
e forecasting methods are
Question 1
A
1. Regular time plus overtime constitutes 600 hours per quarter
2. Peak demand is 19000 hours per Quarter
3. Total emplyee required 19000/600 =
4. So 21 employees need to be hired 3000*21 =

Type Cost per year No. of employee/hours

Regular wage 24000 32
Overtime wage $ 18/hr 3000
Hiring cost
Total

B Chase Strategy

Demand in hrs Employees required

Quarter 1 6000 12
Quarter 2 12000 24
Quarter 3 19000 38
Quarter 4 9000 18
Total 92

C My Stretegy: Instead of hiring 14 in quarter 3 and then laying off 20 in quart

Demand in hrs Employees required

Quarter 1 6000 12
Quarter 2 12000 24
Quarter 3 19000 31
Quarter 4 9000 18
Total 85
uarter

31.666666667 ≅ 32
63000

of employee/hours cost Undertime hours

32 768000 Quarter 1 10000
3000 54000 Quarter 2 4000
Hiring cost 63000 Quarter 4 7000
Total 885000 Total 21000

How much to
hire Fire
1 0 Cost Cost per person Total people
12 0 Wages 6000 92
14 0 Hiring 3000 27
0 20 Firing 2000 20
27 20 Total

3 and then laying off 20 in quarter 4, we can hire less in quarter 3 and compensate the time with overtime hrs.
How much to
hire Fire Overtime Hrs
1 0 0 Cost Cost per person or hr Total people or hr
12 0 0 Wages 6000 85
7 0 3500 Hiring 3000 20
0 13 Firing 2000 13
20 13 3500 Overtime 18 3500
Total
Total
552000
81000
40000
673000

Total
510000
60000
26000
63000
659000
Question 2
A
1. Regular time plus overtime constitutes 600 hours per quarter
2. Peak demand is 6400 hours per Quarter
3. Total emplyee required 19000/600 =
4. So 3 extra employees need to be hired 10000*3 =

Type Cost per 2 year No. of employee/hours

Regular wage 57600 11
Overtime wage $ 20/hr 2080
Hiring cost
Total

B Chase Strategy

Demand in hrs Employees required

Quarter 1 4200 9
Quarter 2 6400 14
Quarter 3 3000 7
Quarter 4 4800 10
Quarter 5 4400 10
Quarter 6 6240 13
Quarter 7 3600 8
Quarter 8 4800 10
Total 81

C
My Stretegy: This plan begins with just 9 workers for Quarter 1, as with the chase strat
6, making up the shortfall with overtime

Demand in hrs Employees required

Quarter 1 4200 9
Quarter 2 6400 11
Quarter 3 3000 9
Quarter 4 4800 9
Quarter 5 4400 9
Quarter 6 6240 11
Quarter 7 3600 9
Quarter 8 4800 9
Total 76
uarter

10.666666667 ≅ 11
30000
Undertime hours
of employee/hours cost Quarter 1 1080
11 633600 Quarter 3 2280
2080 41600 Quarter 4 480
Hiring cost 30000 Quarter 5 880
Total 705200 Quarter 7 1680
Quarter 8 480
Total 6880

How much to
hire Fire
1 0 Cost Cost per person Total people
5 0 Wages 7200 81
0 7 Hiring 10000 14
3 0 Firing 4000 12
0 0 Total
3 0
0 5
2 0
14 12

Quarter 1, as with the chase strategy. However, it increases temporarily the workforce to 11 employees in Quarters 2and

How much to
hire Fire Overtime Hrs
1 0 0 Cost Cost per person or hr Total people or hr
2 0 1120 Wages 7200 76
0 2 0 Hiring 10000 5
0 0 480 Firing 4000 4
0 0 80 Overtime 20 3120
2 0 960 Total
0 2 0
0 0 480
5 4 3120
Total
583200
140000
48000
771200

Total
547200
50000
16000
62400
675600
Question 3
A Part time instructor

Demand in hrs Certified Workforce Certified hiring

Quarter 1 4200 9 1
Quarter 2 6400 10 1
Quarter 3 3000 8 0
Quarter 4 4800 8 0
Quarter 5 4400 8 0
Quarter 6 6240 10 2
Quarter 7 3600 8 0
Quarter 8 4800 8 0
Total 69 4

B A disadvantage of hiring temporary employees may be the difficulty finding, hiring,

and retaining them though this plan reduces hiring and layoffs of certified instructors,
reduces overtime, and reduces total costs.
Certified firing PT work hours PT hiring PT firing Overtime
0 0 0 0 0
0 720 3 0 880
2 0 0 3 0
0 720 3 0 240
0 560 0 0 0
0 720 0 0 720
2 0 0 3 0
0 720 3 0 240
4 3440 9 6 2080
Cost Cost per person or hr Total people or hr Total
Regular Wages 7200 69 496800
Certified Hiring 10000 4 40000
Certified Firing 4000 4 16000
PT Hiring 2000 9 18000
PT Cost 12 3440 41280
Overtime 20 2080 41600
Total 653680
Question 4
A, B Total demand for an year is 340000 gallons and dividing it in each quarter equally

Production Rate Demand Rate Inventory

Quarter 1 85000 80000 5000
Quarter 2 85000 50000 40000
Quarter 3 85000 80000 45000
Quarter 4 85000 130000 0

Thus quarterly production rate should be 85000 gallons

C
The above solution will not work this time as the demand will be more in quarter 2 than we have
from both production and inventory. So, we need to consider first two quarters. The total demand
is 210000 in first two quarters so we need atleast 105000 gallons of production rate in each
quarter to serve the demand. Same is shown in below table.

Production Rate Demand Rate Inventory

Quarter 1 85000 80000 5000
Quarter 2 85000 130000 -40000
Quarter 3 85000 50000 -5000
Quarter 4 85000 80000 0
 rter 2 than we have
ers. The total demand
on rate in each

Production Rate Demand Rate Inventory

Quarter 1 105000 80000 25000
Quarter 2 105000 130000 0
Quarter 3 105000 50000 55000
Quarter 4 105000 80000 80000
Question 5
A Level Strategy Production Plan

Month Demand No. of Employees Total Production

140
1 500 163 1630
2 800 163 1630
3 1000 163 1630
4 1400 163 1630
5 2000 163 1630
6 3000 163 1630
7 2700 163 1630
8 1500 163 1630
9 1400 163 1630
10 1500 163 1630
11 2000 163 1630
12 1200 163 1630
Total 1956

B Chase Strategy Production Plan: No End Inventory

Month Demand No. of Employees Total Production

140
1 500 50 500
2 800 80 800
3 1000 100 1000
4 1400 140 1400
5 2000 200 2000
6 3000 300 3000
7 2700 270 2700
8 1500 150 1500
9 1400 140 1400
10 1500 150 1500
11 2000 200 2000
12 1200 120 1200
Total 1900
C Mixed Strategy Production Plan: First 7 months Level and then Chase

Month Demand No. of Employees Total Production

140
1 500 163 1630
2 800 163 1630
3 1000 163 1630
4 1400 163 1630
5 2000 163 1630
6 3000 163 1630
7 2700 163 1630
8 1500 150 1500
9 1400 140 1400
10 1500 150 1500
11 2000 200 2000
12 1200 120 1200
Total 1901

D Cost Comparison

Level Chase
Wages 3912000 3800000
Hiring 46000 620000
firing 0 165000
inventory 439680 0
Total 4397680 4585000
Inventory at Start Inventory at end hiring firing

0 1130 23 0
1130 1960 0 0
1960 2590 0 0
2590 2820 0 0 Wages
2820 2450 0 0 Hiring
2450 1080 0 0 firing
1080 10 0 0 inventory
10 140 0 0 Total
140 370 0 0
370 500 0 0
500 130 0 0
130 560 0 0
13740 23 0

Inventory at Start Inventory at end hiring firing

0 0 0 90
0 0 30 0
0 0 20 0 Wages
0 0 40 0 Hiring
0 0 60 0 firing
0 0 100 0 inventory
0 0 0 30 Total
0 0 0 120
0 0 0 10
0 0 10 0
0 0 50 0
0 0 0 80
0 310 330
n Chase

Inventory at Start Inventory at end hiring firing

0 1130 23 0
1130 1960 0 0
1960 2590 0 0 Wages
2590 2820 0 0 Hiring
2820 2450 0 0 firing
2450 1080 0 0 inventory
1080 10 0 0 Total
10 10 0 13
10 10 0 10
10 10 10 0
10 10 50 0
10 10 0 80
12090 83 103

Mixed
3802000
166000
51500
386880
4406380
Cost of one unit or person total
2000 3912000
2000 46000
500 0
32 439680
Total 4397680

Cost of one unit or person total

2000 3800000
2000 620000
500 165000
32 0
Total 4585000
Cost of one unit or person total
2000 3802000
2000 166000
500 51500
32 386880
Total 4406380
Question 7
1. Cost of hiring and firing is 3000 and 2000 dollars respectively.
2. Overtime is 750 dollars per week.
3. Regular Wage is 500 dollar per week.
4. Using breakeven analysis we can find number of week of demand surge
above which new hiring is justified
5. Equating the Cost line we can find number of weeks of demand surge

5000 + 500*W = 750W

6. Solving above equation we get W = 20

Answer This we need atleast 20 weeks of demand surge to justify new hiring
Question 9
A Overtime is authorized only when demand is more than production rate and inventory available, so
management wait till month 6 and shortage of available overtime occurs

Month Demand No. of Employee Production rate Start Inventory

9
1 25000 9 18000 24000
2 16000 9 18000 17000
3 15000 9 18000 19000
4 19000 9 18000 22000
5 32000 9 18000 21000
6 29000 9 18000 7000
7 27000 9 18000 -400
8 22000 9 18000 -5800
9 14000 9 18000 -6200
10 15000 9 18000 0
11 20000 9 18000 3000
12 6000 9 18000 1000
Total 108

B Back order upto 4000 units is also not adequate as after 6 months the back order is going above 4000

Month Demand No. of Employee Production rate Start Inventory

9
1 25000 9 18000 24000
2 16000 9 18000 17000
3 15000 9 18000 19000
4 19000 9 18000 22000
5 32000 9 18000 21000
6 29000 9 18000 7000
7 27000 9 18000 -4000
8 22000 9 18000 -13000
9 14000 9 18000 -17000
10 15000 9 18000 -13000
11 20000 9 18000 -10000
12 6000 9 18000 -12000
Total 108
C If we fully utilize overtime of first 4 months then we can overcome our problem

Month Demand No. of Employee Production rate Start Inventory

9
1 25000 9 18000 24000
2 16000 9 18000 20600
3 15000 9 18000 26200
4 19000 9 18000 32800
5 32000 9 18000 35400
6 29000 9 18000 21400
7 27000 9 18000 10400
8 22000 9 18000 1400
9 14000 9 18000 0
10 15000 9 18000 4000
11 20000 9 18000 7000
12 6000 9 18000 5000
Total 108
inventory available, so

End Inventory Overtime Required Overtime Available

24000 0 0
17000 0 0
19000 0 0
22000 0 0
21000 0 0
7000 0 0
-400 4000 3600
-5800 9400 3600
-6200 9800 3600
0 2200 2200
3000 0 0
1000 0 0
13000 25400 13000
90600

rder is going above 4000

End Inventory Back order

24000
17000 0
19000 0
22000 0
21000 0
7000 0
-4000 4000
-13000 13000
-17000 17000
-13000 13000
-10000 10000
-12000 12000
0 0
End Inventory Overtime Required Overtime used
24000 0 0
20600 3600 3600
26200 3600 3600
32800 3600 3600
35400 3600 3600
21400 0 0
10400 0 0
1400 0 0
0 2600 2600
4000 0 0
7000 0 0
5000 0 0
17000 0 0
181200 17000 17000