Compute the exponentially smoothed forecast of calls for

Question

Problem 1:

Data collected on the yearly demand for 50 pound bags of fertilizer at Wallace Garden Supply are shown in the following table.

Develop a 3-year moving average to forecast sales. Then eastimate demand again with a wieghted moving average in which sales in the most recent year are given a weight of 2 and sales in the other 2 years are eac h given a wieght of 1.

which method do you think is best?

YEAR	DEMAND FOR FERTILIZER  (1,000s OF BAGS)
1	4
2	6
3	4
4	5
5	10
6	8
7	7
8	9
9	12
10	14
11	15

Problem 2:

Sales of Cool-man air conditioners have grown steadily during the past 5 years:

YEAR	SALES
1	450
2	495
3	518
4	563
5	584
6	?

The sales manager had predicted, before the business started , that year 1's sales would be 410 air conditioners. Using exponential smoothing with a weight of Alpha(a) = 0.30, develop forecasts for years 2 through 6.

Problem 3:

Emergency calls to Winter Park, Florida's 911 system, for the past 24 weeks are as follows:

WEEK	CALLS	WEEK	CALLS	WEEK	CALLS
1	50	9	35	17	55
2	35	10	20	18	40
3	25	11	15	19	35
4	40	12	40	20	60
5	45	13	55	21	75
6	35	14	35	22	50
7	20	15	25	23	40
8	30	16	55	24	65

(a) Compute the exponentially smoothed forecast of calls for each week. Assume an initial forecast of 50 calls in the first week and use Alpha(a)=0.1. What is the forecast for the 25th week?

(b) Reforecast each period using a(alpha)=0.6

Which smoothing constant provides a superior forecast?

Problem 4:

In the past, Judy Holmes's tire dealership sold an average of 1,000 radials each year. In the past two years, 200 and 250, respectively, were sold in fall, 350 and 300 in winter, 150 and 165 in spring, and 300 and 285 in summer. With a major expansion planned, judy projects sales next year to increase to 1,200 radials.

What will the demand be each season?