Question

This activity has the purpose of assessing the students knowledge how to make a time series forecast using quantitative models. 1. The following data represents the average “delivery speed” to fulfill customer’s orders in a hypothetical organization. In period 10, changes were made on the fulfillment process, as a result of an improvement Six Sigma initiative. Period? 1 2 3 4 5 6 7 8 9 10 Delivery Speed (days) 5 6 8 4 6 7 6 6 7 8 Period? 11 12 13 14 15 16 17 18 19 20 Delivery Speed (days) 6 4 5 6 5 4 8 4 7 4 2. Explain if the change made in Period 10 was sound. 3. What is your forecast of delivery-speed in Period 21. You have to choose a model (consider at least three models and using the MAD explain which is the best.)

Answer 1

As we can see, the changes made in period 10 are NOT sound and MAD has increased in the later period from 0.96 to 1.16. Similarly, the variations have increased.

Simple average forecast for period 21 = 5

Weighted average = 4.9