dolution

Operations Management

Please briefly answer the following questions

1. List the specific weaknesses of each of the following approaches to developing a forecast.

a. Consumer surveys

b. Salesforce composite

c. Committee of managers or executives

Answer:

2. Suppose a software producer is about to release a new version of its popular software. What information do you think it would take into account in forecasting initial sales?

Answer:

3. A commercial bakery has recorded sales (in dozens) for three products, shown as follows:

Day	Blueberry Muffins	Cinnamon Buns	Cupcakes
1	30	18	45
2	34	17	26
3	32	19	27
4	34	19	23
5	35	22	22
6	30	23	48
7	34	23	29
8	36	25	20
9	29	24	14
10	31	26	18
11	35	27	47
12	31	28	26
13	37	29	27
14	34	31	24
15	33	33	22

a. Predict orders for the following day for each of the products using an appropriate naive method.

Hint: Plot each data set.

b. What should the use of sales data instead of demand imply?

Answer:

4. National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows:

Month	Sales (000units)
Feb.	19
Mar.	18
Apr.	15
May	20
Jun.	18
Jul.	22
Aug.	20

a. Plot the monthly data on a sheet of graph paper.

b. Forecast September sales volume using each of the following:

(1) The naive approach

(2) A five-month moving average

(3) A weighted average using .60 for August, .30 for July, and .10 for June

(4) Exponential smoothing with a smoothing constant equal to .20, assuming a March forecast of 19(000)

(5) A linear trend equation

c. Which method seems least appropriate? Why? (Hint: Refer to your plot from part a.)

d. What does use of the term sales rather than demand presume?

Answer:

5. The following equation summarizes the trend portion of quarterly sales of condominiums over a long cycle. Sales also exhibit seasonal variations. Using the information given, prepare a forecast of sales for each quarter of next year (not this year), and the first quarter of the year following that.

Quarter	Relative
1	1.1
2	1.0
3	0.6
4	1.3

Answer:

6. A pharmacist has been monitoring sales of a certain over-the-counter pain reliever. Daily sales during the last 15 days were as follows:

Day	1	2	3	4	5	6	7	8	9
Sold	36	38	42	44	48	49	50	49	52
Day	10	11	12	13	14	15
Sold	48	52	55	54	56	57

a. Which method would you suggest using to predict future sales—a linear trend equation or trend-adjusted exponential smoothing? Why?

b. If you learn that on some days the store ran out of the specific pain reliever, would that knowledge cause you any concern? Explain.

c. Assume that the data refer to demand rather than sales. Using trend-adjusted smoothing with an initial forecast of 50 for day 8, an initial trend estimate of 2, and a = ß = .3, develop forecasts for days 9 through 16. What is the MSE for the eight forecasts for which there are actual data?