DR. EDMUND PRATER QUESTIONS

PROBLEM SITUATION #3
Peter’s Peripherals assembles multimedia upgrade kits --- sets of components for adding sound and video to desktop computers. The demand for their kits for the next four quarters is estimated in the table below. Unit manufacturing cost for each kit is $160. Holding costs on each kit is $80 per quarter. Any kit that must be delivered late is assessed a backorder cost of $120. Each worker is capable of finishing 10 kits per quarter. If the company chooses to vary work force levels, it will incur costs of $400 for each additional worker; $600 for each termination. The company currently has 28 employees.

| |2007 - III |2007-IV …show more content…

|Week |Actual Demand |
|1 |10 |
|2 |25 |
|3 |20 |
|4 |10 |
|5 |15 |

1. Using a four week moving average, what is your forecast for week six? a. 15 b. 17.5 c. 32.5 d. 25 e. none of the above

2. What is the exponentially smoothed forecast for week 2, assuming the forecast for week 1 was 16.5 and the smoothing constant is 0.2? a. 17.16 b. 11.3 c. 15.2 d. 15.85 e. none of the above

3. What is the exponentially smoothed forecast for week 6, assuming the forecast for week 5 was 16.5 and the smoothing constant is 0.0? a. 10 b. 15 c. 15.85 d. 16.5 e. none of the above

PROBLEM SITUATION #6
Art Gowan’s microbrewery had forecast sales of $220,000 for the last month. The actual sales turned out to be $250,000.

1. What is the forecast for this month using exponential smoothing and a smoothing constant of 0.3? a. $184,000 b. $235,000 c. $211,000 d. $229,000 e. none of the above

2. If actual sales turn out to be $240,000 this month, what would