UNIVERSITI TEKNOLOGI MARA

EXERCISE/ ASSIGNMENT 2

Name : ______________________________________________

Group : ______________________________________________

Answer all questions.

1) The Carbondale Hospital is considering the purchase of new ambulance. The decision will rest partly on the anticipated mileage to be driven next year. The miles driven during the past 5 years are as follows: (7 marks)

YEAR MILEAGE1 3,000

2 4,000

3 3,400

4 3,8005 3,700

a) Forecast the mileage for next year (6th year) using a 2-yearmoving average.(2 Marks)b) Find the MAD based on the 2-year moving average (1Mark)c) Use a weighted 2-year moving average with weights of 0.40 and 0.6 (most recent week) to

forecast next year’s mileage. What MAD results for using this approach to forecasting (2 Marks)

d) Compute the forecast for year 6 using exponential smoothing, an initial forecast for year 1 of 3,000 miles, and α=0.5. (2Marks)

2) The actual demand for the patients at Ohama Emergency Clinic for the first six weeks of this year follows: (5 Marks)

WEEK ACTUAL NO. OF PATIENTS

1 65

2 62

3 70

4 485 636 52

Clinic administrator Marc Schniederjans wants you to forecast patient demand at the clinic for week 7 by using this data. You decide to use a weighted moving average method to find this forecast. Your method uses four actual demand levels, with weights of 0.333 on the present period, 0.25 one period ago, 0.25 two periods ago, and 0.167 for three periods ago.

a) What is the value of your forecast? (1.5 Marks)b) If instead the weights were 20, 15, 15 and 10 respectively, how would the forecast change?

Explain why. (2 Marks)c) What if the weights were 0.40, 0.30, 0.20 and 0.10, respectively? Now what is the forecast for

week 7? (1.5 Marks)

3) Use exponential smoothing with a smoothing constant of 0.3 to forecast the registrations at the seminar given in following table. (3 Marks)

YEAR 1 2 3 4 5 6 7 8 9 10 11REGISTRATION (000)

4 6 4 5 10 8 7 9 12 14 15

To begin the procedure, assume that the forecast for year 1 was 5,000 people sign up.a) What is the MAD?(1.5 Marks)b) What is MSE? (1.5 Marks)

4) Lenovo uses the ZX-81 chip in some of it laptop computers. The prices for the chip during the past 12 months were as follows. (31 Marks)

MONTH PRICE PER CHIP

MONTH PRICE PER CHIP

January $1.80 July 1.80

February 1.67 August 1.83

March 1.70 September 1.70

April 1.85 October 1.65May 1.90 November 1.70June 1.87 December 1.75

a) Use a 2-month moving average on all the data and plot the averages and the prices. (6 Marks))

b) Use a 3-month moving average and add the 3-month plot to the graph created in part (a) (5 Marks)

c) Which is better (using the mean absolute deviation): the 2-month average or 3-month average? (3 Marks)

d) Compute the forecasts for each month using exponential smoothing, with an initial forecast for January of $1.80. Use α=0.1, then α=0.3, and finally α=0.5. Using MAD, which α is the best? Explain why. (17 Marks)

Please answer all questions (Individual work) Please bring the answer on Thursday (2 October 2014)

Who didn’t answer the questions will lose 10% from the assessment mark (assignment). If you have any problem you can come and see me AT my office (Level 14-2C)