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This document contains multiple homework problems related to forecasting techniques including naive forecasting, moving averages, exponential smoothing, regression analysis, and seasonality. Specific problems involve forecasting registrations for an accounting seminar using different methods, demand forecasting using exponential smoothing, evaluating forecast accuracy using MAD and MSE, sales forecasting for industrial vacuum cleaners using simple and weighted moving averages, trend estimation and forecasting using least squares regression, adjusting a sales forecast for seasonality, forecasting library patronage using a trend equation, cost forecasting using a regression model, job performance forecasting using multiple regression, developing a regression model to correlate bank deposits and consumer price indices, using regression to forecast coal demand based on a weather index, and developing

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abdul majeed
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170 views

New Text Document

This document contains multiple homework problems related to forecasting techniques including naive forecasting, moving averages, exponential smoothing, regression analysis, and seasonality. Specific problems involve forecasting registrations for an accounting seminar using different methods, demand forecasting using exponential smoothing, evaluating forecast accuracy using MAD and MSE, sales forecasting for industrial vacuum cleaners using simple and weighted moving averages, trend estimation and forecasting using least squares regression, adjusting a sales forecast for seasonality, forecasting library patronage using a trend equation, cost forecasting using a regression model, job performance forecasting using multiple regression, developing a regression model to correlate bank deposits and consumer price indices, using regression to forecast coal demand based on a weather index, and developing

Uploaded by

abdul majeed
Copyright
© © All Rights Reserved
Available Formats
Download as TXT, PDF, TXT or read online on Scribd
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Chapter 4 Internet Homework Problems

4.50 Registration numbers for an accounting seminar over the past 10 weeks
are shown below:
Week 1 2 3 4 5 6 7 8 9 10
Registrations 22 21 25 27 35 29 33 37 41 37
a) Starting with week 2 and ending with week 11, forecast registrations
using the naive forecasting method.
b) Starting with week 3 and ending with week 11, forecast registration
using a two-week moving average.
c) Starting with week 5 and ending with week 11, forecast registrations
using a four-week moving average.
d) Plot the original data and the three forecasts on the same graph. Which
forecast smoothes the data the most? Which forecast responds to change the best?

4.51 Given the following data, use exponential smoothing ( = 0.2) to develop a
demand forecast. Assume the forecast for the initial period is 5.
Period 1 2 3 4 5 6
Demand 7 9 5 9 13 8

4.52 Calculate (a) MAD and (b) MSE for the following forecast versus actual
sales figures:
Forecast 100 110 120 130
Actual 95 108 123 130

4.53 Sales of industrial vacuum cleaners at Larry Armstrong Supply Co. over the
past 13 months are shown below:
Month Jan. Feb. March April May June July
Sales (in thousands) 11 14 16 10 15 17 11
Month Aug. Sept. Oct. Nov. Dec. Jan.
Sales (in thousands) 14 17 12 14 16 11
a) Using a moving average with 3 periods, determine the demand for vacuum
cleaners for next February.
b) Using a weighted moving average with 3 periods, determine the demand
for vacuum cleaners for February. Use 3, 2, and 1 for the weights of the most
recent, second most recent, and third most recent periods, respectively. For
example, if you were forecasting the demand for February, November would have a
weight of 1, December would have a weight of 2, and January would have a weight of
3.
c) Using MAD, determine which is the better forecast.
d) What other factors might Armstrong consider in forecasting sales?

4.54 Passenger miles flown on Northeast Airlines, a commuter firm serving


the Boston hub, are shown for the past 12 weeks:
Week 1 2 3 4 5 6
Actual Passenger Miles 17 21 19 23 18 16
(in thousands)
Week 7 8 9 10 11 12
Actual Passenger Miles 20 18 22 20 15 22
(in thousands)
a) Assuming an initial forecast for week 1 of 17,000 miles, use
exponential smoothing to compute miles for weeks 2 through 12. Use α = .2.
b) What is the MAD for this model?
c) Compute the RSFE and tracking signals. Are they within acceptable
limits?
4.55 Given the following data, use least squares regression to derive a trend
equation. What is your estimate of the demand in period 7? In period 12?
Period 1 2 3 4 5 6
Demand 7 9 5 11 10 13

4.56 Joe Barrow, owner of Barrow’s Department Store, has used time-series
extrapolation to forecast retail sales for the next 4 quarters. The sales estimates
are $120,000, $140,000, $160,000, and $180,000 for the respective quarters.
Seasonal indices for the 4 quarters have been found to be 1.25, .90, .75, and 1.10,
respectively. Compute a seasonalized or adjusted sales forecast.

4.57 The director of the Riley County, Kansas, library system would like to
forecast evening patron usage for next week. Below are the data for the past 4
weeks:
Mon Tue Wed Thu Fri Sat
Week 1 210 178 250 215 160 180
Week 2 215 180 250 213 165 185
Week 3 220 176 260 220 175 190
Week 4 225 178 260 225 176 190

a) Calculate a seasonal index for each day of the week.


b) If the trend equation for this problem is y= 201.74 + .18x, what is the
forecast for each day of week 5? Round your forecast to the nearest whole number.

4.58 A careful analysis of the cost of operating an automobile was conducted by a


firm. The following model was developed:
Y = 4,000 + 0.20X
where Y is the annual cost and X is the miles driven.
a) If the car is driven 15,000 miles this year, what is the forecasted
cost of operating this automobile?
b) If the car is driven 25,000 miles this year, what is the forecasted
cost of operating this automobile?

4.59 The following multiple-regression model was developed to predict job


performance as measured by a company job performance evaluation index based on a
preemployment test score and college grade point average (GPA):
Y = 35 + 20X1 + 50X2
where Y = job performance evaluation index
X1 = preemployment test score
X2 = college GPA
a) Forecast the job performance index for an applicant who had a 3.0 GPA
and scored 80 on the preemployment score.
b) Forecast the job performance index for an applicant who had a 2.5 GPA
and scored 70 on the preemployment score.

4.60 A study to determine the correlation between bank deposits and consumer price
indices in Birmingham, Alabama, revealed the following (which was based on n = 5
years of data):

x = 15
x2 = 55
xy = 70
y = 20
y2 = 130

a) What is the equation of the least square regression line?


b) Find the coefficient of correlation. What does it imply to you?
c) What is the standard error of the estimate?

4.61 The accountant at Rick Wing Coal Distributors, Inc., in San Francisco
notes that the demand for coal seems to be tied to an index of weather severity
developed by the U.S. Weather Bureau. When weather was extremely cold in the U.S.
over the past 5 years (and the index was thus high), coal sales were high. The
accountant proposes that one good forecast of next year’s coal demand could be made
by developing a regression equation and then consulting the Farmer’s Almanac to see
how severe next year’s winter would be. For the data in the following table, derive
a least squares regression and compute the coefficient of correlation of the data.
Also compute the standard error of the estimate.
Coal Sales, y
(in millions of tons) 4 1 4 6 5
Weather Index, x 2 1 4 5 3

4.62 Given the following data, use least squares regression to develop a relation
between the number of rainy summer days and the number of games lost by the Boca
Raton Cardinal baseball team.
Year 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Rainy Days 15 25 10 10 30 20 20 15 10 25
Games Lost 25 20 10 15 20 15 20 10 5 20

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