Homework #1
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School
University of Missouri, Columbia *
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Course
7350
Subject
Industrial Engineering
Date
Feb 20, 2024
Type
Pages
4
Uploaded by KidBat4022
Team 5: Mirieli Estaili da Silva Santos
Sora El-Rjoob
Yu Xuan Ng (Winnie)
Dr. Suchithra Rajendran
ISE 7350
February 11, 2023
Homework 1
1.
A typical supply chain manager has to make the decisions listed below. Categorize each
as
strategic, tactical,
or
operational.
(10 points)
a.
Number of warehouses needed and where to locate them: Strategic.
b.
Assignment of customer orders to inventory or production: Operational.
c.
Choosing vendors to supply critical raw materials: Strategic.
d.
Selecting a transportation provider for shipments to customer: Tactical.
e.
Given the factory capacity, determining the quarterly production schedule: Tactical.
f.
Choosing to produce a part internally or to outsource that part: Strategic.
g.
Setting inventory policies at retail locations: Tactical.
h.
Choosing a transportation mode for shipping: Tactical.
i.
Reordering materials to build inventory: Operational.
j.
Allocating inventory to customer backorders: Operational.
k.
Creating the distribution plan to move finished goods inventory from warehouses to
retail locations: Tactical.
2.
Explain the differences between qualitative and quantitative forecasting methods. Which
method is applicable under what conditions? (5 points)
Qualitative forecasting method
is appropriate when lacking historical data, such as
when launching a new product. It includes market research and analysis, experts’
opinions, and surveys.
Quantitative forecasting method
assumes that the forces that generated past demand
will continue to generate future demand.
3.
N&O
: Chapter 2, #13 (10 points)
Two forecasting methods have been used to evaluate the same economic time series. The
results are:
Forecast from Method 1
Forecast from Method 2
Realized Value
223
210
256
289
320
340
430
390
375
134
112
110
190
150
225
550
490
525
Compare the effectiveness of these methods by computing the MSE, the MAD, and the
MAPE. Do each of the measures of forecasting accuracy indicate that the same
forecasting technique is best? If not, why?
Forecast Method 1
Forecast Method 2
MSE
1523.5
1599.167
MAD
37.166
32.166
MAPE
0.141
0.116
No. There is no major difference between the results obtained from either method.
MSE for method 1 is better as it shows less error value.
MAD for method 2 is better as it shows less error value.
MAPE for method 2 is better as it shows less error value.
Therefore, different forecasting methods can yield more efficient results.
4.
N&O:
Chapter 2, #19. (15 points)
Parts (a) through (c) are based on the following observations of the demand for a certain part
stocked at a parts supply depot during the calendar year. Month
Demand
Month
Demand
January
89
July
223
February
57
August
286
March
144
September
212
April
221
October
275
May
177
November
188
June
280
December
312
a.
Using a four-month moving average, determine the one-step-ahead forecasts for July
through December.
One-Step-Ahead
July
205.5
Avg(280+177+221+144)/4
August
225.5
Avg(223+280+177+221)/4
September
241.5
Avg(286+223+280+177)/4
October
250.25
Avg(212+286+223+280)/4
November
249
Avg(275+212+286+223)/4
December
240
Avg(188+275+212+286)/4
b.
Using a four-month moving average, determine the two-step-ahead forecasts for July
through December. (Hint: the two-step-ahead forecast for July is based on the
observed demands in February through May.)
Two-Step-Ahead
July
149.75
Avg(57+144+221+177)/4
August
205.5
Avg(144+221+177+280)/4
September
225.5
Avg(221+177+280+223)/4
October
241.5
Avg(177+280+223+286)/4
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