Cavite State University

College of Economics, Management and Development Studies

DEPARTMENT OF ECONOMICS

III-BS Economics Dr. Gilchor P. Cubillo

First Semester, AY 2020-2021 Professor
ECON 85
Operations Research
ASSIGNMENT NO. 7 (Forecasting Techniques)

1. Phillip Cane, the managing editor of Your Life Magazine, needs to develop a forecasting
system for monthly newsstand sales in order to schedule press runs. Sales in thousands
of copies for the last eight months of 2020 (the first year o0f publication) were:

Month (2020) Sales

May 50
June 45
July 60
August 52
September 69
October 60
November 47
December 53

Phillip does not believe there is a seasonal pattern. Make the forecast using the
following techniques for the first six months of 2021: (30 points)

a) 3-month moving average

b) 3-month weighted moving average (weights are 3,2,1 : the highest for the
most recent past month data)
c) Exponential smoothing with α = 0.4
d) Ordinary least squares technique or linear regression analysis

2. Make graphical presentations of your answers in No.1 and determine which

forecasting technique will you recommend which could result to the best forecasting
system for the Your Life Magazine. Explain your answer. (20 points)
 Cavite State University
College of Economics, Management and Development Studies
DEPARTMENT OF ECONOMICS

III-BS Economics Dr. Gilchor P. Cubillo

First Semester, AY 2020-2021 Professor
ECON 85
Operations Research
ASSIGNMENT NO. 8 (Inventory Theory)

1. Suppose that the demand for a product is 25 units per month, and the items are
withdrawn uniformly. The set up cost each time a production run is made is $15. The
production cost is $1 per item, and the inventory holding cost is $0.30 per item per
month. (25 points)

a) Assuming shortages are not allowed, determine how often to make a

production run and what size it should be.
b) If shortages cost is $1.5 per item per month, determine how often to make a
production run and what size it should be.

2. The demand for product is 600 units per week, and the items are withdrawn uniformly.
The items are ordered, and the setup cost is $25. The unit cost of each item is $3, and
the inventory holding cost is $0.05 per item per week. (25 points)

a) Assuming shortages are not allowed, determine how often to order and what
size should it be.
b) If shortages cost is $2.00 per item per week, determine how often to order
and what size it should be.