Question

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	Two weeks ago
1	Three weeks ago
6	Total

Problem 3:

A firm uses simple exponential smoothing with 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 are examined, and 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 Battery Sales	Forecast
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 2003 sales.

Year	Sales (Units)
1996	100
1997	110
1998	122
1999	130
2000	139
2001	152
2002	164

To minimize computations, transform the value of x (time) to simpler numbers. In this case, designate year 1996 as year 1, 1997 as year 2, etc.

Problem 6:

Given the forecast demand and actual demand for 10-foot fishing boats, compute the tracking signal and MAD.

Year	Forecast Demand	Actual Demand
1	78	71
2	75	80
3	83	101
4	84	84
5	88	60
6	85	73

Problem: 7

Over the past year Meredith and Smunt Manufacturing had annual sales of 10,000 portable water pumps. The average quarterly sales for the past 5 years have averaged: spring 4,000, summer 3,000, fall 2,000 and winter 1,000. Compute the quarterly index.

Problem: 8

Using the data in Problem 7, Meredith and Smunt Manufacturing expects sales of pumps to grow by 10% next year. Compute next year’s sales and the sales for each quarter.

Answer 1

A three week moving average means that the value of a particular week will be the average of the past three weeks. In the problem 01 mentioned we have been given the auto sales figure of the first six weeks. In order to calculate the three week moving average we need to start from week 4 as we need atleast 3 prior weeks of data to work.

The table below will describe the solution:

Week	Auto sales	3 week moving average (Answer)
1	8
2	10
3	9
4	11	(8+10+9)/3 = 9
5	10	(10+9+11)/3 = 10
6	13	(9+11+10)/3 = 10
7		(11+10+13) = 11.33