PROBLEM 4.9 A) Month Price per Chip ($) 2-month moving average January 1.8 February 1.67 March 1.7 1.735 April 1.85 1.685 May 1.9 1.775 June 1.87 1.875 July 1.8 1.885 August 1.83 1.835 September 1.7 1.815 October 1.65 1.765 November 1.7 1.675 December 1.75 1.675 January 1.725 B) Month Price per Chip ($) 3-month moving average January 1.8 February 1.67 March 1.7 April 1.85 1.72 May 1.9 1.74 June
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Case study: Forecasting at Hard Rock Café 1. Hard Rock uses a 3- year weighted moving average to evaluate to evaluate managers and set bonuses and determine the café sales. A moving average is also used in which they applied 20% to sales 2 years ago. Using multiple regression‚ managers can compute the impact on demand of other menu items if the price of one item is changed. The three other areas which we think Hard Rock could use forecasting models are: • Computerized Scheduling
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For example‚ raw materials for the leather jackets need to be ordered 8 months ahead. And‚ in the short term‚ food and labor for daily operations should be forecasted. Hard Rock uses many of the forecasting techniques as: moving averages‚ weighted moving averages‚ exponential smoothing‚ and regression analysis. They start forecasting at the unit level every month‚ then take it to the quarter‚ and then to a year. All this data is compared to previous years and to the budget expectation to make
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| Chapter 14 Questions | | 3. Many companies take customer orders via Web sites. Put yourself in the place of the person at Ford Motor Company considering this approach to taking customer orders for the Ford Explorer sport utility vehicle. | What information would you need to collect from the customer? | I would collect information on the exact specifications of the Ford Explorer such as Model Year‚ engine capacity‚ interior finishing‚ power windows‚ power steering‚ and any luxury
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Sheet “Population of Arizona” in HW 2 perform the following functions in Excel and answer the following questions. a. Use a 2 period moving average to forecast the Population of Arizona for the year 2010 – do the calculations from 1929-2010. (5 Points) b. Calculate the Mean Absolute Deviation for this Data Set (5 Points) c. Use a 3 period weighted moving average (previous Year 60%‚ 2 years Previous 30% and 3 years previous 10%) to forecast the Population of Arizona for the year 2010 – do the calculations
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Excel Chapter 8 Test 1) Match each term with the correct definition (15 points) A sequence of averages computed from parts of a data series that smoothes fluctuations in data to show a trend more clearly. Moving average In a moving average‚ the number of cells to include in the average. Interval Expenses that remain the same each month. Fixed expenses A point at which an entity covers its costs and starts to make a profit. Break-even A what-if
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Altavox Excel Data (1) Week 1 2 3 4 5 6 7 8 9 10 11 12 13 Average Atlanta 33 45 37 38 55 30 18 58 47 37 23 55 40 40 Boston 26 35 41 40 46 48 55 18 62 44 30 45 50 42 Chicago 44 34 22 55 48 72 62 28 27 95 35 45 47 47 Dallas 27 42 35 40 51 64 70 65 55 43 38 47 42 48 Los Angles 32 43 54 40 46 74 40 35 45 38 48 56 50 46 Total 162 199 189 213 246 288 245 204 236 257 174 248 229 222 Altavox Data (2) Week -5 -4 -3 -2 -1 Atlanta 45 38 30 58 37 Boston 62 18 48 40 35 Chicago 62 22 72 44 48
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DEMAND FORECASTING Demand forecasting is the process of predicting future average sales on the basis of historical data samples and market intelligence. The volatility of demand from an average level is supplied from the safety inventory. Any forecast is likely to be wrong‚ so the focus should be on understanding the range of potential forecast errors and the level of safety inventory that will cater for peak demand. An important additional calculation is forecast bias. This is the cumulative
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5 310 June 6 175 July 7 155 Aug 8 130 Sept 9 220 Oct 10 277.5 Nov 11 235 Dec 12 1. 3 Month Moving Averages: The forecast for April is average of Jan‚ Feb and Mar shipments‚ =(200+135+195)/3‚ enter D5=SUM(C2:C4)/3 in EXCEL file. Copy and paste this column. So‚ forecast for Dec. shipments is 244.17 2. Similarly‚ for Five Month Average will be E7=SUM(C2:C6)/5= 207.4; copy and paste the formula till the end. So‚ forecast for Dec is 203.50 3. EXPONENTIAL
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walks through a cafe’s door. The sale of each entrée represents one customer. They forecast monthly guest counts‚ retail sales‚ banquet sales‚ and concert sales (if applicable) at each café. In order to evaluate management‚ a 3-year weighted moving average is applied to cafe sales. As the text described‚ the most recent two years are weighted 40% each while the third prior year is weighted at 20%. If cafe general managers exceed their targets‚ a bonus is computed. By having a sophisticated evaluation
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