SALES DATA Use the data provided to answer questions 1 through 4. Month Sales 1
ID: 3144481 • Letter: S
Question
SALES DATA
Use the data provided to answer questions 1 through 4.
Month
Sales
1
8552
2
7759
3
8315
4
8175
5
8817
6
8335
7
8188
8
7990
9
8090
10
7807
11
8365
12
8650
These are the sales figures for the TX-750 calculator. Calculators are sold every day of the month, but are only produced at the factory 5 days per week, Monday through Friday.
Demand Forecasting- Problems
1.) What is the 4-Period Simple Moving Average Forecast for Period 13?
2.) What is the 4-Period Weighted Moving Average Forecast for Period 13? Use weights of 0.10, 0.20, 0.30 and 0.40 for periods 9 through 12, respectively.
3.) Since the demand seems to be fairly stable over the 12 month period, which of your two Period 13 forecasts would you use? A. Simple moving average B. Weighted moving average
4.) If we assume an average of 22 working days per month in the factory, how many calculators will need to be produced per day in the facotry if we use 4-Period Simple Moving Average Forecast for Period 13?
Thanks so much!
Month
Sales
1
8552
2
7759
3
8315
4
8175
5
8817
6
8335
7
8188
8
7990
9
8090
10
7807
11
8365
12
8650
Explanation / Answer
Ans 1) The 4- Period Simple Moving Average Forecast can be found by calculating the average of the last 4 month sales. = Avg ( sales of month 9 + sales of month 10 + sales of month 11 + sales of month 12)
= (8090 + 7807 + 8365 + 8650) / 4 = 32912 / 4 = 8228.
Ans 2) Weighted Moving Average Forecast is calculated when we need to give more weightage to the recent data than the older data. The weights must always add up to 1 or 100 %. Most preferably, the highest weigth is given to the most recent data.
For calculating the 4 - period Weighted Moving Average Forecast for Period 13 we need to multiply the given weights to the sales of the assigned months. The question already mentions the assigning of the data to the respective months.
Hence, Ans = (8090 X 0.10) + (7807 X 0.20) + (8365 X 0.30) + (8650 X 0.40)
= 809 + 1561.40 + 2509.50 + 3460 = 8339.90
Ans 3) Moving Average is used to eliminate the fluctuations between the sales. The difference between Simple and Weighted Moving Average Forecast is that Weigthed Moving Average is used to differentiate or rather give weightage to the most recent data than the older ones. This is not required when the data , which in our case is the sales, is stable. Hence, for a stable data, Simple Moving Average Forecast must be used.
So, we shall use Simple Moving Average Forecast for Period 13.
Ans 4) Working days = 22 (given)
4 - Period Simple Moving Average Forecast for Period 13 = (8090 + 7807 + 8365 + 8650 ) / 4
= 8228
The average is 8228. To find the each day production we will divide the period 13 average by 22.
Hence, Ans = 8228 / 22 = 374.
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Thank you.
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