POM102 Quiz #1

1. A. and B.

Week Units 3-Week Moving Average 3-Week Weighted Moving Average

1 30
2 33
3 35
30 + 33 + 35
4 34 = 32.67 [(0.5 x 35) + (0.3 x 33) + (0.2 x 30)] = 33.4
3
33 + 35 + 34
5 32 = 34 [(0.5 x 34) + (0.3 x 35) + (0.2 x 33)] = 34.1
3
35 + 34 + 32
6 36 = 33.67 [(0.5 x 32) + (0.3 x 34) + (0.2 x 35)] = 33.2
3
34 + 32 + 36
7 = 34 [(0.5 x 36) + (0.3 x 32) + (0.2 x 34)] = 34.4
3

C. and D.

Week Units Forecast ( = 0.1) Forecast ( = 0.6)

1 30 29 29
2 33 29 + 0.1(30-29) = 29.10 29 + 0.6(30-29) = 29.60
3 35 29.1 + 0.1(33-29.1) = 29.49 29.6 + 0.6(33-29.6) = 31.64
4 34 29.49 + 0.1(35-29.49) = 30.04 31.64 + 0.6(35-31.64) = 33.66
5 32 30.04 + 0.1(34-30.04) = 30.44 33.66 + 0.6(34-33.66) = 33.86
6 36 30.44 + 0.1(32-30.44) = 30.59 33.86 + 0.6(32-33.86) = 32.74
7 30.59 + 0.1(36-30.59) = 31.13 32.74 + 0.6(36-32.74) = 34.70

E.

Week Units
1 30 29 0 29
2 33 0.1(30) + 0.9(29+0) = 29.10 0.6(29.1-29)+0.4(0) = 0.06 29.1 + 0.06 = 29.16
3 35 0.1(33) + 0.9(29.16) = 29.54 0.6(29.54-29.1)+0.4(0.06) = 0.29 29.54 + 0.29 = 29.83
4 34 0.1(35) + 0.9(29.83) = 30.35 0.6(30.35-29.54)+0.4(0.29) = 0.60 30.35 + 0.60 = 30.95
5 32 0.1(34) + 0.9(30.95) = 31.26 0.6(31.26-30.35)+0.4(0.60) = 0.78 31.26 + 0.78 = 32.04
6 36 0.1(32) + 0.9(32.05) = 32.04 0.6(32.04-31.26)+0.4(0.78) = 0.78 32.04 + 0.78 = 32.82
7 0.1(36) + 0.9(32.82) = 33.13 0.6(33.13-32.04)+0.4(0.78) = 0.97 33.13 + 0.97 = 34.11
 2.

=0.2
Week Actual Demand Forecast with =0.2 Absolute Deviation for =0.2 Absolute Percent Error
0 23 29.00 |23-29| = 6 6
100( ) = 26.09%
23
1 26 27.80 |26-27.8| = 1.8 1.8
100( ) = 6.92%
26
2 29 27.44 |29-27.44| = 1.56 1.56
100( ) = 5.38%
29
3 24 27.75 |24-27.75| = 3.75 3.75
100( ) = 15.63%
24
4 22 27.00 |22-27| = 5 5
100( ) = 22.73%
22
5 21 26.00 |21-26| = 5 5
100( ) = 23.81%
21
Total 23.11 100.56%

23.11 100.56%
MAD = = 3.85 MAPE = = 16.76%
6 6

=0.8
Week Actual Demand Forecast with =0.2 Absolute Deviation for =0.2 Absolute Percent Error
0 23 29.00 |23-29| = 6 6
100( ) = 26.09%
23
1 26 24.20 |26-24.2| = 1.8 1.8
100( ) = 6.92%
26
2 29 25.64 |29-25.64| = 3.36 3.36
100( ) = 11.59%
29
3 24 28.33 |24-28.33| = 4.33 4.33
100( ) = 18.04%
24
4 22 24.87 |22-24.87| = 2.87 2.87
100( ) = 13.05%
22
5 21 22.57 |21-22.57| = 1.57 1.57
100( ) = 7.48%
21
Total 19.93 83.16%

19.93 83.16%
MAD = = 3.32 MAPE = = 13.86%
6 6

Mr. Ethan Lee should use alpha=0.8 because it has a lower percentage of error.
 3. A.
Annual Labor Productivity
Year Year # Units # of Workers Labor-Hours
(units per labor-hour)
43 800
2012 1 43 800 9 (9 x 6 x 200) = 10 800 = 4.0566
10 800
50 400
2013 2 50 400 9.5 (9.5 x 6 x 200) = 11 400 = 4.4211
11 400
52 800
2014 3 52 800 10 (10 x 6 x 200) = 12 000 = 4.4000
12 000
55 600
2015 4 55 600 10.5 (10.5 x 6 x 200) = 12 600 = 4.4127
12 600
61 000
2016 5 61 000 11.5 (11.5 x 6 x 200) = 13 800 = 4.4203
13 800

Year 2 (2013) was the most productive from the 5 years, with an annual labor productivity of 4.4211. Year 1
(2012) on the other hand, was the least productive with an annual labor productivity of 4.0556.

4.4211 + 4.4 + 4.4127 + 4.4203

B. Four-Year Moving Average (2017) = = 4.4135
4

C.
Year Year # (x) Units (y) 2 Xy
2012 1 43 800 1 43 800
2013 2 50 400 4 100 800
2014 3 52 800 9 158 400
2015 4 55 600 16 222 400
2016 5 61 000 25 305 000
Total 15 263 600 55 830 400

n=5
=
15
=3 REGRESSION EQUATION
5
=
263 600
= 52 720
AND LINE
5
830 4005(3)(52 720) 39 600 65
b = = = 3 960
55(5)(32 ) 10 60 y = 3.96x + 40.84
a = 52 720 3 960(3) = 40 840 55
= 40 840 + 3 960x
50
45
D.
40
2017 x = 6 0 1 2 3 4 5 6
Demand in 2017 = 40 840 + 3 960(6) = 64 600
units

2018 x = 7
Demand in 2018 = 40 840 + 3 960(7) = 68 560 units

E.
Year Units Annual Labor Productivity # of Workers
68 560
2017 64 600 4.4135 = 12.1974 = 12
4.4135
64 600
2018 68 560 4.4135 = 12.9451 = 13
4.4135
 4. A. and B.

Average
Average Yearly Quarterly
Quarter 2013 2014 2015 Quarterly 2017 Forecast
Demand Index
Demand
52+60+71 350 61 550
Q1 52 60 71 = 61 = 87.5 = 0.6971 x 0.6971 = 95.85 = 96
3 4 87.5 4
80+101+110 350 97 550
Q2 80 101 110 = 97 = 87.5 = 1.1086 x 1.1086 = 152.43 = 152
3 4 87.5 4
58+74+84 350 72 550
Q3 58 74 84 = 72 = 87.5 = 0.8229 x 0.8229 = 113.15 = 113
3 4 87.5 4
99+122+139 350 120 550
Q4 99 122 139 = 120 = 87.5 = 1.3714 x 1.3714 = 188.57 = 189
3 4 87.5 4
Total 350

C.

No. of
Daily Sales Daily Sales Daily Sales
Working Daily Sales (2017)
(2013) (2014) (2015)
Days
189
October 22 36 45 51 x 22 = 69.3 = 69
60
189
November 20 33 41 46 x 20 = 63
60
189
December 18 30 37 42 x 28 = 56.7 = 57
60
Total 60 99 122 139 189
 5. A.

B.

Max {90 000, 100 000, 110 000}

Buy 1: 0.3(90 000) + 0.7(110 000) = 104 000

Buy 2: 0.3(75 000) + 0.7(130 000) = 113 500

The best option for the manager is to purchase 2 machines initially as it yields a higher payoff of $113 500.

C.

Buy 1: 0.6(90 000) + 0.4(110 000) = 98 000

Buy 2: 0.6(75 000) + 0.4(130 000) = 97 500

The best option for the manager is to purchase 1 machine initially as it yields a higher payoff of $98 000.