Operations Management: An Integrated Approach, 5th Edition

Problems

1. Sales for a product for the past three months have been 200, 350, and 287. Use a three-month moving average to calculate a forecast for the fourth month. If the actual demand for month 4 turns out to be 300, calculate the forecast for month 5.

2. Lauren's Beauty Boutique has experienced the following weekly sales:

Week	Sales
1	432
2	396
3	415
4	458
5	460

Forecast sales for week 6 using the naïve method, a simple average, and a three-period moving average.

3. Hospitality Hotels forecasts monthly labor needs.

• (a) Given the following monthly labor figures, make a forecast for June using a three-period moving average and a fiveperiod moving average.

  Month	Actual Values
  January	32
  February	41
  March	38
  April	39
  May	43

• (b) What would be the forecast for June using the naïve method?
• (c) If the actual labor figure for June turns out to be 41, what would be the forecast for July using each of these models?
• (d) Compare the accuracy of these models using the mean absolute deviation (MAD).
• (e) Compare the accuracy of these models using the mean squared error (MSE).

4. The following data are monthly sales of jeans at a local department store. The buyer would like to forecast sales of jeans for the next month, July.

• (a) Forecast sales of jeans for March through June using the naïve method, a two-period moving average, and exponential smoothing with an α = 0.2. (Hint: Use naïve to start the exponential smoothing process.)
• (b) Compare the forecasts ...