BMGT22B – QUANTITATIVE TECHNIQUES

Total = 100 points

Compute for the demand forecast using the required quantitative methods of forecasting

a. Exponential smoothing with trend (at α = 0.20, β = 0.40) (30 pts)

Month Actual Smoothed Forecast Smoothed Trend Forecast including Trend

Demand (Ft) (Tt) (FITt)

January 100 90 10 100

February 125 100 10 110

March 130 113 11.2 124.2

April 150 125.36 11.66 137.02

May 190 139.62 12.70 152.32

June 230 159.86 15.72 175.58

July 250 186.46 20.10 206.53

August 210 215.22 23.56 238.78

September 180 233.02 25.64 258.66

October 325 242.93 22.51 265.44

November 350 277.35 17.47 294.82

December 375 305.85 24.25 330.10

b. Least Square Method (complete the table = 30 pts)

Month Time Actual x2 x*y Forecasted Demand

Period (x) Demand (y) (using trend line
equation)

January 2020 1 100 1 100 90

February 2020 2 125 4 250 113

March 2020 3 130 9 390 137

April 2020 4 150 16 600 160

May 2020 5 190 25 950 183

June 2020 6 230 36 1380 206

July 2020 7 250 49 1750 230

August 2020 8 210 64 1680 253

September 2020 9 180 81 1620 276

October 2020 10 325 100 3250 299

November 2020 11 350 121 3850 322

December 2020 12 375 144 4500 346

∑x = 78 ∑y = 2615 ∑x2 =650 ∑xy = 20320

x̄ = 6.5 ȳ = 217.92

i. Formulate the trend line equation: ‘y = a +bx’ (10 pts.)

y = 66.93 + 23.23x

ii. Graph the actual demand and the trend line (10 pts.)
400

350

300

250

200

150

100

50

0
1 2 3 4 5 6 7 8 9 10 11 12

Actual Demand (y)

Forecasted Demand (using trend line equation)
iii. What ‘correlation’ can you interpret from the graph? (10 pts.)

The correlation shown in the graph is Positive Correlation because 0 < r < 1.

iv. Compute for r-value (10 pts.)

r = 0.92