Income at the architectural firm Spraggins and Yunes for the period February to July was as follows:FebruaryApril MayMonthIncome ($000's)35.028.126.3March32.6June34.5July32.0Assume that the initial forecast for February is 30.0 (in $ thousands) and the initial trend adjustment is 0. The smoothingconstants selected are α = 0.1 and ß = 0.3. Using trend-adjusted exponential smoothing, the forecast for thearchitectural firm's August income is thousand dollars (round your response to two decimal places).

Ft = alpha*actual of previous period +(1-alpha)*previous forecast trend = beta*(Ft of same - Ft of…

Answered: (5000 S) Assume that the initial…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 46P

See similar textbooks

Similar questions

The Baker Company wants to develop a budget to predict how overhead costs vary with activity levels. Management is trying to decide whether direct labor hours (DLH) or units produced is the better measure of activity for the firm. Monthly data for the preceding 24 months appear in the file P13_40.xlsx. Use regression analysis to determine which measure, DLH or Units (or both), should be used for the budget. How would the regression equation be used to obtain the budget for the firms overhead costs?
Under what conditions might a firm use multiple forecasting methods?
The owner of a restaurant in Bloomington, Indiana, has recorded sales data for the past 19 years. He has also recorded data on potentially relevant variables. The data are listed in the file P13_17.xlsx. a. Estimate a simple regression equation involving annual sales (the dependent variable) and the size of the population residing within 10 miles of the restaurant (the explanatory variable). Interpret R-square for this regression. b. Add another explanatory variableannual advertising expendituresto the regression equation in part a. Estimate and interpret this expanded equation. How does the R-square value for this multiple regression equation compare to that of the simple regression equation estimated in part a? Explain any difference between the two R-square values. How can you use the adjusted R-squares for a comparison of the two equations? c. Add one more explanatory variable to the multiple regression equation estimated in part b. In particular, estimate and interpret the coefficients of a multiple regression equation that includes the previous years advertising expenditure. How does the inclusion of this third explanatory variable affect the R-square, compared to the corresponding values for the equation of part b? Explain any changes in this value. What does the adjusted R-square for the new equation tell you?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
Data collected on the yearly demand for 50-pound bags of fertilizer at Wallace Garden Supply are shown in the following table: YEAR DEMAND FOR FERTILIZER (1,000S OF BAGS) 1 4 2 6 3 4 4 5 5 10 6 8 7 7 8 9 9 12 10 14 11 15 a) Forecast demand again with a weighted moving average in which sales in the most recent year are given a weight of 2 and sales in the other 2 years are each given a weight of 1?
a) The demand forecast for Month 6 would be: A. 565 haircuts B. 574 haircuts C. 578 haircuts D. 584 haircuts b) With Mean Absolute Deviation (MAD) as the criterion, the best forecasting model for this time series data is: A. Naïve approach B. 2-week Simple Moving Average (SMA) C. Weighted Moving Average (WMA) with weights: 0.5, 0.3, 0.2 D. Exponential Smoothing (ES) with alpha = 0.8
Calanute Beach Resort, a fictional seaside luxury hotelin Goa, India, had the following occupancy rates for 12months in 2014Month Occupancy Rate in %1 652 683 724 755 786 837 928 889 7610 6511 6412 69a Forecast the occupancy rate for January2015 usingsimple exponential smoothing with α = 0.4. Assumethat the forecast for Month 2 (F2) is 65%. b Forecast the January 2015 occupancy rate usingtrend-adjusted simple exponential smoothing with α =…
Clinic administrator Marc Schniederjans wants you to forecastpatient demand at the clinic for week 7 by using this data. You decide to use a weighted moving average method to find this fore-cast. Your method uses four actual demand levels, with weights of 0.333 on the present period, 0.25 one period ago, 0.25 two peri-ods ago, and 0.167 three periods ago. a) What is the value of your forecast? PXb) If instead the weights were 20, 15, 15, and 10, respectively, howwould the forecast change? Explain why. c) What if the weights were 0.40, 0.30, 0.20, and 0.10, respec-tively? Now what is the forecast for week 7?
4 Trinity General Hospital had the following number of patient admissions during the past 8 weeksWeek Patient Admissions1 1202 1453 954 1125 1306 1107 1008 140 a. Develop a 3-week weighted average forecast forWeek 4 through 9 with weightsW1 = 0.2W2 = 0.3W3 = 0.5 b. Forecast patient admissions for week 9 using simpleexponential smoothing with α = 0.2. Assume that the forecast for Week 2 (F2) is the naïve forecast.
Simple exponential smoothing (with a 0.2) is beingused to forecast monthly beer sales at Gordon’s LiquorStore. After observing April’s demand, the predicted demandfor May is 4,000 cans of beer.a At the beginning of May, what is the prediction forJuly’s beer sales?b Actual demand during May and June is as follows:May, 4,500 cans of beer; June, 3,500 cans of beer. Afterobserving June’s demand, what is the forecast for July’sdemand?c The demand during May and June averages out to 4,5002 3,500 4,000 cans per month. This is the same asthe forecast for monthly sales before we observed theMay and June data. Yet after observing the May andJune demands for beer, our forecast for July demand hasdecreased from what it was at the end of April. Why?
The following table shows the actual demand observed over the last 11 years: Year 1 2 3 4 5 6 7 8 9 10 11 Demand 6 8 4 7 11 7 13 12 10 13 8 This exercise contains only parts b, c, and d. Part 2 b) Using the 3-year moving average, provide the forecast from periods 4 through 12 (round your responses to one decimal place). Part 3 c) Using the 3-year weighted moving average with weights 0.10, 0.30, and 0.60, using 0.60 for the most recent period, provide the forecast from periods 4 through 12 (round your responses to two decimal places). Part 4 d) Mean absolute deviation for the forecast developed…

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Contemporary Marketing

Marketing

ISBN:

9780357033777

Author:

Louis E. Boone, David L. Kurtz

Publisher:

Cengage Learning

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Contemporary Marketing

Marketing

ISBN:

9780357033777

Author:

Louis E. Boone, David L. Kurtz

Publisher:

Cengage Learning

Marketing

ISBN:

9780357033791

Author:

Pride, William M

Publisher:

South Western Educational Publishing

SEE MORE TEXTBOOKS