# Chapter 5

Topics: Forecasting, Exponential smoothing, Time series analysis Pages: 3 (741 words) Published: May 1, 2013
Chapter 5
1. The forecasting staff for the pizzer Corporation has developed a model to predict sales of its air-cushioned ride snowmobiles. The mobiles specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 40, Z and inversely with the price of a sownmpbiles p. Based on past data the best estimate of this relationship is

S=K YZ
P

Where K has been estimate (with past date ) to equal 100.
a. If Y =\$11,000, Z=\$1,200 and P=\$20,000 what value would you predict for S? b. What happen if P is reduced to \$17,500?
c. How would you go about developing a value for K?
d. What are the potential weaknesses of this model?

5. A firm experienced the demand shown in the following table Year : Actual Demand : 5Year moving Average : 3Year moving Average: Exponential Smoothing (w=0.9) : Exponential Smoothing (W=0.3) 2000 800 xxxxx xxxxx xxxxx xxxxx 2001 925 xxxxx xxxxx _ _ 2002 900 xxxxx xxxxx _ _ 2003 1025 xxxxx _ _ _ 2004 1150 xxxxx _ _ _ 2005 1160 _ _ _...