Q 1. 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 page 125 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? 2. National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month period were as follows: Month Sales (000 units) 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 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? Freight car loadings over a 12-year period at a busy port are as follows: Week Number Week Number Week Number 1 220 7 350 13 460 2 245 8 360 14 475 3 280 9 400 15 500 4 275 10 380 16 510 5 300 11 420 17 525 6 310 12 450 18 541 a. Determine a linear trend line for expected freight car loadings. b. Use the trend equation to predict expected loadings for weeks 20 and 21. c. The manager intends to install new equipment when the volume exceeds 800 loadings per week. Assuming the current trend continues, the loading volume will reach that level in approximately what week? 21. Two different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows: page 130 PREDICTED DEMAND Period Demand F1 F2 1 68 66 66 2 75 68 68 3 70 72 70 4 74 71 72 5 69 72 74 6 72 70 76 7 80 71 78 8 78 74 80 a. Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate? Explain. b. Compute the MSE for each set of forecasts. Given your results, which forecast appears to be more accurate? c. In practice, either MAD or MSE would be employed to compute forecast errors. What factors might lead a manager to choose one rather than the other? d. Compute MAPE for each data set. Which forecast appears to be more accurate? 23. Long-Life Insurance has developed a linear model that it uses to determine the amount of term life insurance a family of four should have, based on the current age of the head of the household. The equation is: where a. Plot the relationship on a graph. b. Use the equation to determine the amount of term life insurance to recommend for a family of four if the head of the household is 30 years old.