Question

5. Shipments (in tons) of welded tube by an aluminum producer are shown below:

	1	2	3	4	5	6	7	8	9	10	11
Tons	2	3	6	10	8	7	12	14	14	18	19

Required: -

(a)Graph the data, and comment on the relationship.

(b)Compute a 3-year moving average, plot it as a dotted line, and use it to forecast shipments in year 12.

(c)Using a weight of 3 for the most recent data, 2 for the next, and 1 for the oldest, forecast shipments in year 12.

Solutions

Answer 1

Solution:

(a)

As we can observe the relationship between shipment with time is positive, with time the quantity of shipment increases.

(b) The three year moving average is plotted as :

Based on the three year moving average the shipment forecasted for year 12 is 19 shipments.

(c) Using the weight of three the value of forecast for year 12 is (3*19 + 2*18 + 1*14)/6 = 17.8 shipments.