Concept explainers
A
Interpretation:The better forecast using visibility forecast of second year which is set at 100 is to be chosen.
Concept Introduction:Method of time series that viewed coming period forecast is observations of current period is one period moving average
B
Interpretation:The better forecast using visibility forecast of third year which is set at 100 with supporting basis is to be estimated.
Concept IntroductionVisibility forecast is a method of forecast based upon visibility of reading either above or below 100 showing the air pollution. As it is low when it is below 100 and high when above 100.
Want to see the full answer?
Check out a sample textbook solutionChapter 8 Solutions
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
- Under what conditions might a firm use multiple forecasting methods?arrow_forwardThe 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.arrow_forwardThe 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?arrow_forward
- 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?arrow_forwardThe file P13_22.xlsx contains total monthly U.S. retail sales data. While holding out the final six months of observations for validation purposes, use the method of moving averages with a carefully chosen span to forecast U.S. retail sales in the next year. Comment on the performance of your model. What makes this time series more challenging to forecast?arrow_forwardThe file P13_28.xlsx contains monthly retail sales of U.S. liquor stores. a. Is seasonality present in these data? If so, characterize the seasonality pattern. b. Use Winters method to forecast this series with smoothing constants = = 0.1 and = 0.3. Does the forecast series seem to track the seasonal pattern well? What are your forecasts for the next 12 months?arrow_forward
- The file P13_02.xlsx contains five years of monthly data on sales (number of units sold) for a particular company. The company suspects that except for random noise, its sales are growing by a constant percentage each month and will continue to do so for at least the near future. a. Explain briefly whether the plot of the series visually supports the companys suspicion. b. By what percentage are sales increasing each month? c. What is the MAPE for the forecast model in part b? In words, what does it measure? Considering its magnitude, does the model seem to be doing a good job? d. In words, how does the model make forecasts for future months? Specifically, given the forecast value for the last month in the data set, what simple arithmetic could you use to obtain forecasts for the next few months?arrow_forwardAir travel on Mountain Airlines for the past 18 weeks was:Week Passengers1 4052 4103 4204 4155 4126 4207 4248 4339 43810 44011 44612 45113 45514 46415 46616 47417 47618 482a. Explain why an averaging technique would not be appropriate for forecasting.b. Use an appropriate technique to develop a forecast for the expected number of passengers forthe next three weeks.arrow_forwardHow is forecasting accuracy measured? (Provide a definition for “forecasting error” and mention two measures that are used to assess forecasting accuracy.)arrow_forward
- Develop two exponential smoothing forecasts for periods 2 through 11. For the first forecast, use a=0.1. For the second, use a=0.7. Assume that your forecast for period 1 was 205. Click the icon to view the time series data. Find the exponential smoothing forecast for each period when a=0:1 (enter your responses rounded to one decimal place). Period Forecast (0.1) 205 1 2 More Info Period 1 2 3 4 5 6 7 8 9 10 Print Demand 228 249 229 238 231 154 166 157 Demand 228 249 164 161 Donearrow_forwardWhat is the appropriate type of forecasting method to use in each of the followingscenarios:a. Holiday Inn, Inc., is attempting to predict the demand next year for motel rooms,based on a history of demand observations.b. Standard Brands has developed a new type of outdoor paint.The company wishesto forecast sales based on new housing starts.c. IBM is trying to ascertain the cost of a stock-out of a critical tape drive component. They do so by sample survey of managers at various national spare partscenters. The surveys are sent back to the managers for a reassessment, and theprocess is repeated until a consensus is reached.arrow_forwardAn analyst must decide between two different forecasting techniques for weekly sales of roller blades: a linear trend equation and the naive approach. The linear trend equation is F+ = 125+ 2.0t, and it was developed using data from periods 1 through 10. Based on data for periods 11 through 20 as shown in the table, which of these two methods has the greater accuracy if MAD and MSE are used? (Round your intermediate calculations and final answers to 2 decimal places.) t 11 12 13 14 15 16 17 18 19 20 Units Sold 148 150 149 146 156 148 156 156 154 159 163 Click here for the Excel Data File MAD (Naive) MAD (Linear) MSE (Naive) MSE (Linear) 4.78 3.70arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Contemporary MarketingMarketingISBN:9780357033777Author:Louis E. Boone, David L. KurtzPublisher:Cengage LearningMarketingMarketingISBN:9780357033791Author:Pride, William MPublisher:South Western Educational Publishing