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Anuj

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Practice Problems: Chapter 4, Forecasting

Problem 1:

Auto sales at Carmen’s Chevrolet are shown below. Develop a 3-week moving average.

|Week |Auto Sales |
|1 |8 |
|2 |10 |
|3 |9 |
|4 |11 |
|5 |10 |
|6 |13 |
|7 |- |

Problem 2:

Carmen’s decides to forecast auto sales by weighting the three weeks as follows:

|Weights Applied |Period |
|3 |Last week |
|2 |Twoweeks ago |
|1 |Three weeks ago |
|6 |Total |

Problem 3:

A firm uses simple exponential smoothing with [pic] to forecast demand. The forecast for the week of January 1 was 500 units whereas the actual demand turned out to be 450 units. Calculate the demand forecast for the week of January 8.

Problem 4:

Exponential smoothing is used to forecast automobile battery sales. Two value of [pic] are examined, [pic] and [pic] Evaluate the accuracy of each smoothing constant. Which is preferable? (Assume the forecast for January was 22 batteries.) Actual sales are given below:

|Month |Actual |Forecast |
| |Battery Sales| |
|January |20 |22 |
|February |21 | |
|March |15 | |
|April |14 | |
|May |13 | |
|June |16 | |

Problem 5:

Use the sales data given below to determine: (a) the least squares trend line, and (b) the predicted value for 2008 sales.

|Year |Sales (Units)|
|2001 |100 |
|2002 |110 |
|2003 |122

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