A company which installs swimming pools has recently merged with another regional installer. It isbecoming evident that prices over the next 24 months will increase substantially, and the supply manager isconsidering forward buying or some other option to take advantage of what is expected to be an expensiveand tight market. In particular, there is a great need for pool chemicals. In terms of forecasting, which of thefollowing would be most useful in this situation?O Seasonal ForecastingO Future sales based on past salesO Judgment samplingO Delphi method

Forecasting in advance helps to estimate the sales that could be generated in the future period.…

Answered: A company which installs swimming pools…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section: Chapter Questions

Problem 42P: The file P13_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars)...

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Similar questions

Under what conditions might a firm use multiple forecasting methods?
The file P13_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars) through credit unions. a. Use these data to forecast consumer revolving credit through credit unions for the next 12 months. Do it in two ways. First, fit an exponential trend to the series. Second, use Holts method with optimized smoothing constants. b. Which of these two methods appears to provide the best forecasts? Answer by comparing their MAPE values.
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?
The file P13_26.xlsx contains the monthly number of airline tickets sold by the CareFree Travel Agency. a. Create a time series chart of the data. Based on what you see, which of the exponential smoothing models do you think will provide the best forecasting model? Why? b. Use simple exponential smoothing to forecast these data, using a smoothing constant of 0.1. c. Repeat part b, but search for the smoothing constant that makes RMSE as small as possible. Does it make much of an improvement over the model in part b?
All forecasts are subject to error. Do you think topmanagers would be concerned about the effectson the firm if sales revenues or unit costs, forexample, turned out to be different from the forecasted level? How could you provide informationon the effects of such errors?
9) Gasoline sales Times Series week sales (1000s of gallons 1 17 2 21 3 19 4 23 5 18 6 16 7 20 8 18 9 22 10 20 11 15 12 22 With the above gasoline time series data, show the exponential smoothing forecast using alpha = 0.1 i)Applying the MSE measure of forecast accuracy, would you prefer a smoothing constant of Alpha= 0.1 or alpha=0.2 for the gasoline sales time series? ii)Are the results the same if you apply MAE as the measure of accuracy? iii)What are the results if MAPE is used?
What should be our forecast accuracy target if there is a high degree of volatility in customer orders and long lead times? We have a new chief sales officer who is proposing that we should forecast in dollars, not in units/cases. I have never heard of anyone forecasting in dollars. It is true that dollarized forecasts can help Sales in knowing precisely what sales target they should be hitting. But, is it the best practice?
You discovered that the forecasting error falls beyond the acceptable ranges in the past three years. Make a reliable forecast for the demand on your product/service using at least 10 periods of your historical data to forecast the demand for the coming 5 periods. Then compute the MAD for these 5 periods . Period Actual (A) Forecast (F) (A-F) Error 1 107 110 -3 2 125 121 4 3 115 112 3 4 118 120 -2 5 108 109 1 6 118 120 -2 7 108 109 1 8 115 112 -3 9 140 137 -3 10 106 102 -4
Amazon finds that sales in July are much greater relative to other months because of the Amazon Prime days in that month. Assuming that an exponential smoothing model is used for forecasting sales, what should the company best do to make the forecast for the next month (Aug) more reflective of reality? Please pick from the provided options. F t+1 = αDt + (1-α) Ft increase value of alpha decrease value of alpha stay with the same alpha decrease the expected forecast for the current month (Ft) On hearing our forecast, our clients probe - how sure are we about the forecast? Which measure of errror (among those stated below) should we best use to respond? a. Root MSE (RMSE) b. Mean absolute percentage error (MAPE) c. Mean forecast error (Avg. error) d. Cumulative forecast error (CFE)
Herman Hahn is attempting to set up an integrated forecasting and inventory controlsystem for his hardware store, Hahn’s Hardware. When Herman indicates that outdoorlights are a seasonal item on the computer, he is prompted by the program to input theseasonal factors by quarter.Unfortunately, Herman has not kept any historical data, but he estimates that firstquarter demand for the lights is about 30 percent below average, the second-quarterdemand about 20 percent below average, third-quarter demand about average, andfourth-quarter demand about 50 percent above average. What should he input for theseasonal factors?
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 .Substitute for Problem # 4 on in attachment)-Calculate the MAD,revised MAD and the Revised Forecast for months 1-6 for the following three groups,where the Forecast stands for Forecast Demand.Has your forecast improved ? Tell me how would you go about improving the revised forecast( for each of the three groups)without actually doing so? Estate Planning Group Auditing and Accounting Group Business Consulting Group Month Actual Demand Forecast Actual Demand Forecast Actual Demand Forecast 1 100 125 270 230 140 135 2 90 125 240 230 130 135 3 110 125 280 230 160 135 4 115 125 260 230 180 135 5 130 125 300 230 200 135 6 115 125 220 230 190 135

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