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sX f vX
; Profit =
E X X i P X i
2 Variance [ X i E ( X )]2 P( X i )
i 1
i 1
Weighted average =
(maximum in row)
EMV (alternative i)
+ (1 )(minimum in row)
x (probability of first state of nature)
EVwPI = (best payoff for first state of nature) x (probability of first state of nature)
+ (best payoff for second state of nature)
EVSI = =
Y 0 1 X
where Y
b0
b1
= random error
X
X
n
b1
( X X )(Y Y )
(X X )
2
b0 Y b1 X
SST (Y Y )2
r2
SSE e 2 (Y Y )2
SSR
(Y
Y )2
SSR
SSE
1
SST
SST
s 2 MSE
MSR
SSR
k
MSR
MSE
SSE
n k 1
DF
SS
MS
SIGNIFICANCE
Regression
SSR
MSR = SSR/k
MSR/MSE
Residual
n-k-1
SSE
MSE = SSE/(n - k - 1)
Total
n-1
SST
Y b0 b1 X 1 b2 X 2 ... bk X k
(error)
MSE
forecast error
MAD
error
MAPE
n
Sum of demands in previous n periods
Moving average forecast
n
Ft 1
actual
n
100%
Yt Yt 1 ... Yt n 1
n
Ft 1
Ft 1
Exponential Smoothening
New forecast =
Last periods forecast+ (Last periods actual demand Last periods forecast)
Ft 1 Ft (Yt Ft )
where
Ft+1 = new forecast (for time period t + 1)
Ft
= smoothing constant (0 1)
Yt
Tt 1 (1 )T1 ( Ft 1 Ft )
where
D
Co
Q
EOQ Q *
TC
Q
Ch
2
2 DCo
Ch
D
Q
Co C h
Q
2
ROP = d * L
X-bar chart
UCLx x A2 R
LCL x x A2 R
UCLR D4 R
LCLR D3 R
UCL p p z p
LCL p p z p
Range chart
P-chart
p
c-chart
p(1 p )
n
c3
c
4