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Forecasting Problems

1. The document provides sample sales data and asks questions about forecasting future sales using different moving average methods. It also asks to plot and compare the forecasts. 2. It describes a company ABC's plastic packaging production process and challenges in meeting demand. It asks to select a forecasting method to estimate demand for the 6th year based on historical monthly demand data, and explain the choice. 3. It provides passenger vehicle sales data from 2004-2019 and asks to forecast 2020 sales using different methods like naive, moving averages, exponential smoothing. It asks to evaluate the methods, fit a trend line, and comment on the accuracy of forecasts versus real 2020 data. 4. It provides air passenger movement data

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162 views

Forecasting Problems

1. The document provides sample sales data and asks questions about forecasting future sales using different moving average methods. It also asks to plot and compare the forecasts. 2. It describes a company ABC's plastic packaging production process and challenges in meeting demand. It asks to select a forecasting method to estimate demand for the 6th year based on historical monthly demand data, and explain the choice. 3. It provides passenger vehicle sales data from 2004-2019 and asks to forecast 2020 sales using different methods like naive, moving averages, exponential smoothing. It asks to evaluate the methods, fit a trend line, and comment on the accuracy of forecasts versus real 2020 data. 4. It provides air passenger movement data

Uploaded by

Deep
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Forecasting Problems

1. A number of bushels of apples sold at a roadside fruit stand over a12-day period
were as follows:
Day Number Sold
1 25
2 31
3 29
4 33
5 34
6 37
7 35
8 32
9 38
10 40
11 37
12 32

a) If a two-period moving average average had been used to forecast sales, what
would the daily forecasts have been starting with the forecast for Day 3?
b) If a four-period moving average had been used determine what the forecasts
would have been for each day, starting with Day 5.
c) Use a three-period weighted moving average with w1=0.2, w2=0.3, and
w3=0.5 and forecast sales for the seventh and eighth days.
d) Plot the original data and each set of forecasts on the same graph. Which
forecast has the better ability to respond quickly to changes?
2. Mr. Ramesh had a lot on her mind when he left the conference room at ABC
corporation. His divisional manager had informed her that he would be assigned to
a team consisting of ABC’s marketing vice president and staff members from their
key customers. The goal of this team was to improve supply chain performance, as
ABC had been unable to meet demand effectively over the previous several years.
This often left SPC’s customers scrambling to meet new client demands. Ramesh
has little contact with ABC’s customers and wondered how he would add value to
his process. He was told by her division manager that the team’s first task was to
establish a collaborative forecast using data from both ABC and its customers. This
forecast would serve as the basis for improving the firm’s performance, as mangers
could use this the more accurate forecast for their production planning. Improved
Forecast would allow ABC to improve delivery performance.
ABC turns polystyrene resin into recyclable/ disposable containers for the food
industry. Polystyrene is purchased as a commodity in the form of resin pellets.
The resin is unloaded from bulk rail containers or overland trailers into storage
silos. Making the food containers is a two-step process. First resign is conveyed
to an extruder, which converts it into a polystyrene sheet that it wound into rolls.
The rolls are either used immediately to make containers or put into storage.
Second the rolls are loaded onto thermoforming presses, which form the sheet
into containers and trim the containers from the sheet.
Over the past five years, the plastic packaging business has grown steadily.
Demand for containers made from grocery stores, bakeries, and restaurants.
Demand for plastic peaks in the particular period in a year. Capacity on the
extruders is not sufficient to cover demand for sheets during the peak periods.
As a result, the plant is forced to build inventory of sheet in anticipation of
future demand. Table given in the data set “ABC_Data” shows historical
monthly demand for containers.

As a first step in the team’s decision making, it wants to forecast monthly


demand of containers for 6th year. Based on historical trends and market
condition, demand is expected to continue to grow until year 6, after which it is
expected to plateau. Ramesh must select the appropriate forecasting method and
estimate the likely forecast error. Which method should he choose? Why? Using
the method selected, forecast demand for years 6.
Reference: Supply Chain Management: Chapter 7 (Chopra, Meindl and Kalra)

3. India is expected to emerge as the world’s third-largest passenger-vehicle market


by 2021. There is strong growth in the auto sector due to rise in middle class
income and young population. At the same time the automobile industry is in the
turbulence phase due to the advent of electric vehicles and autonomous vehicle. To
reduce the turbulence and to make better policy government of India wants the
forecasting model based on previous sales data. The Society of Indian Automobile
Manufactures (SIAM) has recorded a data for the number of passenger vehicles
sold in the country from 2004-2019 (Refer the dataset Vechile_sales). Using this
data calculate the followings:
a) Determine the sales value for the year 2020 using Naïve method, Simple
average, moving average (2-period).
b) Using the valve of α=1, 0.2, and 0.5 evaluate the sales using first order
exponential smoothing. Plot the forecast value and analyse the results.
c) Which value of α, RMSE will be minimum?
d) Using the same data Fit a trend line and evaluate the slope and intercept of
the line.
e) Compare all the models and suggest which method is most appropriate Ɂ
f) Take the real passenger vehicle sales data (from internet) and comment on
your forecasted value (2020) and real data.

4. The monthly air passenger movements of a particular country over a period of eight
years from 2010-2017 is given in the data set “Airline_Data”.
Plot this data and suggest which model (Naïve method, Simple average, first order
exponential smoothing, second order exponential smoothing, basic model that
captures seasonality which we have discussed in the class) will give best result if
our objective is to forecast Air passenger movements (in Lakhs) for the year 2018.
Also justify your results using RMSE.

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