University of British Columbia
Sauder School of Business
COMM 204: Logistics and Operations Management
PROBLEM SET 5, Due Date: December 2, 2021 11pm
1. The attached spreadsheet contains demand for a period of 24 months. Use this data set to
answer the following questions,
(a) Plot the data. Just by looking at the plot, do you think a 3-week simple moving average
would be a better forecast, or a 6-week simple moving average? Just by looking at the
plot, do you think an exponential smoothing with value of
α
= 0
.
1 would be better
forecast or would
α
= 0
.
3 be better? Explain your reasoning.
(b) Of the four possible forecasts (3-week and 6-week simple moving average and exponential
smoothing with value of
α
= 0
.
1 and
α
= 0
.
3), which is the best forecast? Justify your
answer by calculating MAD.
(c) What would a 1-period moving average forecasting method mean?
(d) Compare and contrast exponential smoothing when
α
is small (near zero) and when
α
is
large (near 1).
2. Based on our class discussion, try to justify the name “Exponential Smoothing”. (Hint: Try
to recursively substitute the formula for
F
n
−
1
in
F
n
,
F
n
−
2
in
F
n
−
1
and so on and so forth.
You should try doing that until you see an exponential trend appearing.)
3. How would you explain the “Bullwhip Effect” to someone who is starting a small-scale business
but hasn’t taken this class? Try to be as succinct as possible.
4. The following are the precedence requirements, normal and crash activity times, and normal
and crash costs for one of the many ever-continuing construction projects on UBC campus,
(a) What is the critical path?
(b) What is the estimated completion time?
(c) To shorten the project by three weeks, which tasks would be shortened and what would
the final total project cost be?
1 of
2