- Habitat for Humanity plans to build 42 small houses on land donated to them by a wealthy philanthropist outside Charlotte, North Carolina. A buyer, Claire Klaudia, for Habitat is considering two
- Compare the differences between independent and dependent demand.
- Identify the basic components of independent demand: average, trend, seasonal, and random variation.
- Describe the common qualitative forecasting techniques such as the Delphi method and Collaborative Forecasting.
- Show how to make a time series forecast using regression, moving averages, and exponential smoothing.
- Use decomposition to forecast when trend and seasonality is present.
- Demand for stereo headphones and CD players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for
- Historical demand for a product is DEMAND January February March April May June 12 11 15 12 16 15a. Using a weighted moving average with weights of 0.60, 0.30, and 0.10, fi nd the July forecast.b.
- The following tabulations are actual sales of units for six months and a starting forecast in January.a. Calculate forecasts for the remaining fi ve months using simple exponential smoothing with ␣
- Zeus Computer Chips, Inc., used to have major contracts to produce the Centrino-type chips.The market has been declining during the past three years because of the dual-core chips, which it cannot
- The tracking signals computed using past demand history for three different products are as follows. Each product used the same forecasting technique.TS 1 TS 2 TS 3 12 34 56 78 910 2.70 2.32 1.70 1.1
- The following table shows the past two years of quarterly sales information. Assume that there are both trend and seasonal factors and that the seasonal cycle is one year. Use time series
- Tucson Machinery, Inc., manufactures numerically controlled machines, which sell for an average price of $0.5 million each. Sales for these NCMs for the past two years were as follows:QUARTER
- Not all the items in your offi ce supply store are evenly distributed as far as demand is concerned, so you decide to forecast demand to help plan your stock. Past data for legal-sized yellow tablets
- Given the following history, use focus forecasting to forecast the third quarter of this year.Use three focus forecasting strategies.JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Last year This
- Here are the actual tabulated demands for an item for a nine-month period (January through September). Your supervisor wants to test two forecasting methods to see which method was better over this
- A particular forecasting model was used to forecast a six-month period. Here are the forecasts and actual demands that resulted:FORECAST ACTUAL April May June July August September 250 325 400 350
- Harlen Industries has a simple forecasting model: Take the actual demand for the same month last year and divide that by the number of fractional weeks in that month. This gives the average weekly
- The following table contains the demand from the last 10 months:MONTH ACTUAL DEMAND MONTH ACTUAL DEMAND 12 34 531 34 33 35 37 67 89 10 36 38 40 40 41a. Calculate the single exponential smoothing
- In this problem, you are to test the validity of your forecasting model. Here are the forecasts for a model you have been using and the actual demands that occurred:WEEK FORECAST ACTUAL 12 34 56 800
- Assume that your stock of sales merchandise is maintained based on the forecast demand. If the distributor’s sales personnel call on the fi rst day of each month, compute your forecast sales by
- Historical demand for a product is as follows:DEMAND April May June July August September 60 55 75 60 80 75a. Using a simple four-month moving average, calculate a forecast for October.b. Using
- Sales by quarter for last year and the fi rst three quarters of this year were as follows:QUARTER I II III IV Last year This year 23,000 19,000 27,000 24,000 18,000 15,000 9,000 Using the focus
- The following table shows predicted product demand using your particular forecasting method along with the actual demand that occurred:FORECAST ACTUAL 1,500 1,400 1,700 1,750 1,800 1,550 1,500 1,600
- Your manager is trying to determine what forecasting method to use. Based upon the following historical data, calculate the following forecast and specify what procedure you would utilize.MONTH
- Use regression analysis on deseasonalized demand to forecast demand in summer 2010, given the following historical demand data:YEAR SEASON ACTUAL DEMAND 2008 2009 Spring Summer Fall Winter Spring
- Here are the data for the past 21 months for actual sales of a particular product:2006 2007 January February March April May June July August September October November December 300 400 425 450 400
- Actual demand for a product for the past three months was Three months ago Two months ago Last month 400 units 350 units 325 unitsa. Using a simple three-month moving average, make a forecast for
- After using your forecasting model for six months, you decide to test it using MAD and a tracking signal. Here are the forecast and actual demands for the six-month period:PERIOD FORECAST ACTUAL May
- Here are earnings per share for two companies by quarter from the fi rst quarter of 2006 through the second quarter of 2009. Forecast earnings per share for the rest of 2009 and 2010. Use exponential
- The following are sales revenues for a large utility company for 1999 through 2009. Forecast revenue for 2010 through 2013. Use your own judgment, intuition, or common sense concerning which model or
- Mark Price, the new productions manager for Speakers and Company, needs to fi nd out which variable most affects the demand for their line of stereo speakers. He is uncertain whether the unit price
- The following table contains the number of complaints received in a department store for the fi rst 6 months of operation.MONTH COMPLAINTS MONTH COMPLAINTS January February March 36 45 81 April May
- The number of cases of merlot wine sold by the Connor Owen winery in an eight-year period is as follows:YEAR CASES OF MERLOT WINE YEAR CASES OF MERLOT WINE 2002 2003 2004 2005 270 356 398 456 2006
- Consider using a simple moving average model. Experiment with models using fi ve weeks’ and three weeks’ past data.The past data in each region is given below (week 1 is the week before week 1 in
- What are the advantages and disadvantages of aggregating demand from a forecasting view? Are there other things that should be considered when going from multiple distributors to a single distributor?
- This is a type of forecast used to make long-term decisions such as where to locate a warehouse or how many employees to have in a plant next year.
- This is the type of demand that is most appropriate for using forecasting models.3 This is a term used for actually infl uencing the sale of a product or service.
- These are the six major components of demand.
- This type of analysis is most appropriate when the past is a good predictor of the future.
- This is identifying and separating time series data into components of demand.
- If the demand in the current week was 102 units and we had forecast it to be 125, what would be next week’s forecast using an exponential smoothing model with an alpha of 0.3?
- Assume that you are using exponential smoothing with an adjustment for trend. Demand is increasing at a very steady rate of about fi ve units per week. Would you expect your alpha and delta
- Your forecast is, on average, incorrect by about
- percent. The average demand is 130 units. What is the MAD?10 If the tracking signal for your forecast were consistently positive, you could then say this about your forecasting technique.
- What would you suggest to improve the forecast described in question 10?
- You know that sales are greatly infl uenced by the amount your fi rm advertises in the local paper. What forecasting technique would you suggest trying?
- What forecasting tool is most appropriate when closely working with customers dependent on your products?
- Construct aggregate plans that employ different strategies for meeting demand.
- Describe what yield management is and why it is an important strategy for leveling demand.
- DAT, Inc., needs to develop an aggregate plan for its product line. Relevant data are Production time Average labor cost Workweek Days per month 1 hour per unit$10 per hour 5 days, 8 hours each day
- Alan Industries is expanding its product line to include new models: Model A, Model B, and Model C. These are to be produced on the same production equipment, and the objective is to meet the demands
- Shoney Video Concepts produces a line of videodisc players to be linked to personal computers for video games. Videodiscs have much faster access time than tape. With such a computer/video link, the
- Prepare an aggregate plan for the coming year, assuming that the sales forecast is perfect. Use the spreadsheet “Bradford Manufacturing”. In the spreadsheet an area has been designated for your
- Review your solution carefully and be prepared to defend it. Bring a printout of your solution to class.
- Term used to refer to the process a fi rm uses to balance supply and demand.
- When doing aggregate planning, these are the three general operations–related variables that can be varied.
- A strategy where the production rate is set to match expected demand.
- When overtime is used to meet demand and avoid the costs associated with hiring and fi ring.
- A strategy that uses inventory and backorders as part of the strategy to meet demand.
- Sometimes a fi rm may choose to have all or part of the work done by an outside vendor. This is the term used for the approach.
- If expected demand during the next four quarters were 150, 125, 100, 75 thousand units and each worker can produce 1,000 units per quarter; how many workers should be used if a level strategy were
- Given the data from question 7, how many workers would be needed for a chase strategy?
- In a service setting, what general operations–related variable is not available compared to a production setting?
- The practice of allocating capacity and manipulating demand to make it more predictable.
- Explain the different purposes for keeping inventory.
- Calculate the appropriate order size when a one-time purchase must be made.
- Describe what the economic order quantity is and how to calculate it.
- Summarize fi xed–order quantity and fi xed–time period models, including ways to determine safety stock when there is variability in demand.
- Discuss why inventory turn is directly related to order quantity and safety stock.
- Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year.Item cost Order cost Annual holding cost (%)Annual demand Average demand$10.00$250.00
- Lieutenant Commander Data is planning to make his monthly (every 30 days) trek to Gamma Hydra City to pick up a supply of isolinear chips. The trip will take Data about two days.Before he leaves, he
- In the past, Taylor Industries has used a fi xed–time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing
- Sally’s Silk Screening produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event itself, which lasts
- Famous Albert prides himself on being the Cookie King of the West. Small, freshly baked cookies are the specialty of his shop. Famous Albert has asked for help to determine the number of cookies he
- Sarah’s Muffl er Shop has one standard muffl er that fi ts a large variety of cars. Sarah wishes to establish a reorder point system to manage inventory of this standard muffl er. Use the following
- Alpha Products, Inc., is having a problem trying to control inventory. There is insuffi cient time to devote to all its items equally. Here is a sample of some items stocked, along with the annual
- A distributor of large appliances needs to determine the order quantities and reorder points for the various products it carries. The following data refer to a specifi c refrigerator in its product
- It is your responsibility, as the new head of the automotive section of Nichols Department Store, to ensure that reorder quantities for the various items have been correctly established.You decide to
- UA Hamburger Hamlet (UAHH) places a daily order for its high-volume items (hamburger patties, buns, milk, and so on). UAHH counts its current inventory on hand once per day and phones in its order
- DAT, Inc., produces digital audiotapes to be used in the consumer audio division. DAT lacks suffi cient personnel in its inventory supply section to closely control each item stocked, so it has asked
- Dave’s Auto Supply custom mixes paint for its customers. The shop performs a weekly inventory count of the main colors that are used for mixing paint. Determine the amount of white paint that
- A particular raw material is available to a company at three different prices, depending on the size of the order:Less than 100 pounds 100 pounds to 1,000 pounds More than 1,000 pounds$20 per
- CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper
- Model most appropriate for making a one-time purchase of an item.
- Model most appropriate when inventory is replenished only in fi xed intervals of time, for example, on the fi rst Monday of each month.
- Model most appropriate when a fi xed amount must be purchased each time an order is placed.
- Based on an EOQ-type ordering criterion, what cost must be taken to zero if the desire is to have an order quantity of a single unit?
- Term used to describe demand that can be accurately calculated to meet the need of a production schedule, for example.
- Term used to describe demand that is uncertain and needs to be forecast.
- We are ordering T-shirts for the spring party and are selling them for twice what we paid for them. We expect to sell 100 shirts and the standard deviation associated with our forecast is 10 shirts.
- We have an item that we stock in our store that has fairly steady demand. Our supplier insists that we buy 1,200 units at a time. The lead time is very short on the item, since the supplier is only a
- For the item described in question 8, if we expect to sell approximately 15,600 units next year, how many trips will we need to make to the supplier over the year?
- If we decide to carry 10 units of safety stock for the item described in questions 8 and 9, and we implemented this by going to our supplier when we had 10 units left, how much inventory would you
- Consider an item that we have 120 units currently in inventory. The average demand for the item is 60 units per week. The lead time for the item is exactly 2 weeks and we carry 16 units for safety
- If we take advantage of a quantity discount would you expect your average inventory to go up or down?Assume that the probably of stocking out criterion stays the same.
- This is an inventory auditing technique where inventory levels are checked more frequently than one time a year.
- Describe what MRP is and where it is best applied.
- Demonstrate how to do an MRP “explosion.”
- Explain how order quantities are calculated in MRP systems.