Score: 32 out of 40 points (80%)

award:

1. 10 out of
10.00
points

Problem 3-8
Air travel on Mountain Airlines for the past 18 weeks was:

Week Passengers Week Passengers

1 405 10 440
2 410 11 446
3 420 12 451
4 415 13 455
5 412 14 464
6 420 15 466
7 424 16 474
8 433 17 476
9 438 18 482

b. Use an appropriate technique to develop a forecast for the expected number of passengers for the next
three weeks. (Round your intermediate calculations to 4 decimal places and final answers to 2
decimal places.)

Week Forecasted Demand

19 484.24
20 488.84
21 493.43

Worksheet Problem 3-8 Learning Objective: 03-11 Prepare a linear trend forecast.

Problem 3-8
Air travel on Mountain Airlines for the past 18 weeks was:

Week Passengers Week Passengers

1 405 10 440
2 410 11 446
3 420 12 451
4 415 13 455
5 412 14 464
6 420 15 466
7 424 16 474
8 433 17 476
9 438 18 482

b. Use an appropriate technique to develop a forecast for the expected number of passengers for the next
three weeks. (Round your intermediate calculations to 4 decimal places and final answers to 2
decimal places.)

Week Forecasted Demand

19 484.25 ± 0.5
20 488.84 ± 0.5
21 493.44 ± 0.5

Explanation:

b.
T y t*y t2
1 405 405 1
2 410 820 4
3 420 1260 9
4 415 1660 16
5 412 2060 25
 6 420 2520 36
7 424 2968 49
8 433 3464 64
9 438 3942 81
10 440 4400 100
11 446 4906 121
12 451 5412 144
13 455 5915 169
14 464 6496 196
15 466 6990 225
16 474 7584 256
17 476 8092 289
18 482 8676 324

Forecasted demand for the next three weeks are:

Y19 = 396.9738 + (4.5934)(19) = 484.25
Y20 = 396.9738 + (4.5934)(20) = 488.84
Y21 = 396.9738 + (4.5934)(21) = 493.44

award:

2. 2 out of
10.00
points

Problem 3-10
After plotting demand for four periods, an emergency room manager has concluded that a trend-adjusted
exponential smoothing model is appropriate to predict future demand. The initial estimate of trend is based
on the net change of 30 for the three periods from 1 to 4, for an average of +10 units.

Period Actual Period Actual

1 217 6 262
2 225 7 264
3 230 8 281
4 247 9 293
5 260 10

Use α=.5 and β=.1, and TAF of 250 for period 5. Obtain forecasts for periods 6 through 10. (Round your
intermediate calculations and final answers to 2 decimal places.)

t Period TAFt
6 265.00
7 275.50
8 285.00
9 294.00
10 294.00

Learning Objective: 03-12 Prepare a trend-adjusted

Worksheet Problem 3-10
exponential smoothing forecast.

Problem 3-10
After plotting demand for four periods, an emergency room manager has concluded that a trend-adjusted
exponential smoothing model is appropriate to predict future demand. The initial estimate of trend is based
on the net change of 30 for the three periods from 1 to 4, for an average of +10 units.

Period Actual Period Actual

1 217 6 262
2 225 7 264
3 230 8 281
4 247 9 293
5 260 10
Use α=.5 and β=.1, and TAF of 250 for period 5. Obtain forecasts for periods 6 through 10. (Round your
intermediate calculations and final answers to 2 decimal places.)

t Period TAFt
6 265.00 ± 0.05
7 274.00 ± 0.05
8 279.35 ± 0.05
9 290.03 ± 0.05
10 301.45 ± 0.05

Explanation:

The initial estimate of trend is based on the net change of 30 for the three periods from 1 to 4, for an
average of +10 units. Use α = .5 and β=.1
Initial trend = (247 – 217) / 3 = 10

t Period At Actual
1 217
2 225
Model 3 230
Development
4 247

t Period At Actual TAFt TAFt + α(At – TAFt) = St Tt–1 + β( TAFt – TAFt–1 – Tt–1) = Tt
5 260 250* 250 + .5(260 – 250) = 255.00 10.00 + .1(0) = 10.00
6 262 265.00 265.00 + .5(262 – 265.00) = 263.50 10.00 + .1(265.00 – 250 – 10.00) = 10.50
7 264 274.00 274.00 + .5(264 – 274.00) = 269.00 10.50 + .1(274.00 – 265.00 – 10.00) = 10.35
Model Test 8 281 279.35 279.35 + .5(281 – 279.35) = 280.18 10.35 + .1(279.35 – 274.00 – 10.35) = 9.85

9 293 290.03 290.03 + .5(293 – 290.03) = 291.52 9.85 + .1(290.03 – 279.35 – 9.85) = 9.93

Next Forecast 10 301.45

* Estimated by the manager
 award:

3. 10 out of
10.00
points

Problem 3-11
A manager of a store that sells and installs spas wants to prepare a forecast for January, February, and
March of next year. Her forecasts are a combination of trend and seasonality. She uses the following
equation to estimate the trend component of monthly demand: Ft = 70 + 5t, where t = 0 in June of last year.
Seasonal relatives are 1.10 for January, 1.02 for February, and .95 for March. What demands should she
predict? (Round your answers to 2 decimal places.)

Month Forecast
January of the next year 181.50
February of the next year 173.40
March of the next year 166.25

Worksheet Learning Objective: 03-11 Prepare a linear trend forecast.

Learning Objective: 03-13 Compute and use seasonal

Problem 3-11
relatives.

Problem 3-11
A manager of a store that sells and installs spas wants to prepare a forecast for January, February, and
March of next year. Her forecasts are a combination of trend and seasonality. She uses the following
equation to estimate the trend component of monthly demand: Ft = 70 + 5t, where t = 0 in June of last year.
Seasonal relatives are 1.10 for January, 1.02 for February, and .95 for March. What demands should she
predict? (Round your answers to 2 decimal places.)

Month Forecast
January of the next year 181.50 ± 0.05
February of the next year 173.40 ± 0.05
March of the next year 166.25 ± 0.05

Explanation:

Yt = 70 + 5t t = 0 (June of last year)

t = 1 (July of last year)
t = 7 (January of this year)
t = 8 (February of this year)
t = 9 (March of this year)
t = 19 (January of next year)
t = 20 (February of next year)
t = 21 (March of next year)
YJan. = 70 + (5)(19) = 165
YFeb. = 70 + (5)(20) = 170
YMar. = 70 + (5)(21) = 175

Forecast = (Trend) * (Seasonal Relative)

Month Trend * Seasonal Relative = Forecast

January 165 * 1.10 181.50
February 170 * 1.02 173.40
March 175 * .95 166.25
 award:

4. 10 out of
10.00
points

Problem 3-15
The manager of a fashionable restaurant open Wednesday through Saturday says that the restaurant does
about 25 percent of its business on Friday night, 34 percent on Saturday night, and 20 percent on Thursday
night. What seasonal relatives would describe this situation?(Round your answers to 2 decimal places.)

Wednesday 0.84
Thursday 0.80
Friday 1.00
Saturday 1.36

Learning Objective: 03-13 Compute and use seasonal

Worksheet Problem 3-15
relatives.

Problem 3-15
The manager of a fashionable restaurant open Wednesday through Saturday says that the restaurant does
about 25 percent of its business on Friday night, 34 percent on Saturday night, and 20 percent on Thursday
night. What seasonal relatives would describe this situation?(Round your answers to 2 decimal places.)

Wednesday 0.84 ± 0.05

Thursday 0.80 ± 0.05
Friday 1.00 ± 0.05
Saturday 1.36 ± 0.05

Explanation:

Wednesday= .21 × 4 = .84

Thursday = .20 × 4 = .80
Friday = .25 × 4 = 1.00
Saturday = .34 × 4 = 1.36