Forecasting (Lecture-4)

Exponential Smoothing
Hi Tek Computer Services repairs and services personal computer at its store and it makes local service call. It primarily uses part-time state university students as technicians. The company has had steady growth since it started. It purchases generic computer parts in volume at a discount from a variety of sources whenever they see a good deal. Thus, they need a good forecast of demand for repairs so that they will know how many computer component parts to purchase and stock, and how many techniques to hire. The company has accumulated the demand data shown in the accompanying table for repair and services calls for past 12 months, from which it wants to consider exponential smoothing forecast using smoothing constant () equal to .030 and 0.50. Demand for repair and service calls Period 1 2 3 4 5 6 7 8 9 10 11 12 Month January February March April May June July August September October November December Demand 37 40 41 37 45 50 43 47 56 52 55 54

Moving Average
A manufacturing company has monthly demand for one of its product as follows: Month Demand February 520 March 490 April 550 May 580 June 600 July 420 August 510 September 610 Develop a three-period moving average forecast and a three period weighted moving average forecast with weights of .50,.30and ,.20 for the most recent demand values, in that order.

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Forecasting (Lecture-4)

Seasonal Adjusted Index

1. Quarterly unit demands for a product are given belowYear Jan-Mar April-June July-Sept Oct-Dec 2007 76 60 84 86 2008 90 77 77 80 2009 70 58 72 72 2010 120 80 70 80 2011 80 65 85 65 Using centered moving average technique determines the seasonal adjusted index for each quarter. 2. Quarterly unit demands for a product are given belowYear Jan-Mar April-June July-Sept Oct-Dec 2007 75 60 84 85 2008 82 58 73 80 2009 85 77 74 79 2010 110 59 71 70 2011 79 68 80 65 Using centered moving average technique determines the seasonal adjusted index for each quarter. 3. A farming cooperative manager wants to estimate quarterly relatives for grain shipments, based on the data shown ( quantities are in metric tons): Year Jan-Mar 1 200 2 210 3 215 4 225 5 232 Determine the quarter relatives. April-June 250 252 260 272 284 July-Sept 210 212 220 233 240 Oct-Dec 340 360 358 372 381

4. Obtain estimated quarter relatives for these data: Year 1 2 3 4 Jan-Mar 14 28 45 58 April-June 18 36 54 July-Sept 35 60 84 Oct-Dec 46 71 58

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Forecasting (Lecture-4)

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