$1.$ Why is forecasting necessary in OSCM?

Ans. $1.$ Planning Processes:

$10\mathrm{.}00$ points

$2.$ From the choice of simple moving average, weighted moving average, exponential smoothing, and linear regression analysis, which forecasting technique would you consider the most accurate? Why?

$10\mathrm{.}00$ points

$3.$ Let$$s say you work for a company that makes prepared breakfast cereals like corn flakes. Your company is planning to introduce a new hot breakfast product made from whole grains that would require some minimal preparation by the consumer. This would be a completely new product for the company. How would you propose forecasting initial demand for this product?

$5\mathrm{.}0$ points

$4.$ What category of forecasting techniques uses managerial judgment in lieu of numerical data?

$5\mathrm{.}0$ point

$5.$ Given the following history, use a three$-$quarter moving average to forecast the demand for the third quarter of this year. Note that the $1$st quarter is Jan, Feb, and Mar; $2$nd quarter Apr, May, Jun; $3$rd quarter Jul, Aug, Sep; and $4$th quarter Oct, Nov, Dec.

$10\mathrm{.}00$ point

$6.$ Always Rain Irrigation, Inc., would like to determine capacity requirements for the next four years. Currently two production lines are in place for making bronze and plastic sprinklers. Three types of sprinklers are available in both bronze and plastic: $90-$degree nozzle sprinklers, $180-$ degree nozzle sprinklers, and $360-$degree nozzle sprinklers. Management has forecast demand for the next four years as follows:

Both production lines can produce all the different types of nozzles. The bronze machines needed for the bronze sprinklers require two operators and can produce up to $12,000$ sprinklers. The plastic injection molding machine needed for the plastic sprinklers requires four operators and can produce up to $200,000$ sprinklers. Three bronze machines and only one injection molding machine are available. What are the capacity requirements for the next four years? $($Assume that there is no learning.$)$

$20\mathrm{.}00$ points

$7.$ Suppose that Always Rain Irrigation$$s marketing department will undertake an intense ad campaign for the bronze sprinklers, which are more expensive but also more durable than the plastic ones. Forecast demand for the next four years is:

What are the capacity implications of the marketing campaign $($assume no learning$)?$

$15\mathrm{.}00$ point

$8.$ A builder has located a piece of property that she would like to buy and eventually build on$.$ The land is currently zoned for four homes per acre, but she is planning to request new zoning. What she builds depends on approval of zoning requests and your analysis of this problem to advise her. With her input and your help, the decision process has been reduced to the following costs, alternatives, and probabilities:

Cost of land: $$2$ million.

Probability of rezoning: $\mathrm{.}60.$

If the land is rezoned, there will be additional costs for new roads, lighting, and so on$,$ of $$1$ million.

If the land is rezoned, the contractor must decide whether to build a shopping center or $1,500$ apartments that the tentative plan shows would be possible. If she builds a shopping center, there is a $70$ percent chance that she can sell the shopping center to a large department store chain for $$4$ million over her construction cost, which excludes the land; and there is a $30$ percent chance that she can sell it to an insurance company for $$5$ million over her construction cost $($also excluding the land$).$

If$,$ instead of the shopping center, she decides to build the $1,500$ apartments, she places probabilities on the profits as follows: There is a $60$ percent chance that she can sell the apartments to a real estate investment corporation for $$3,000$ each over her construction cost; there is a $40$ percent chance that she can get only $$2,000$ each over her construction cost. $($Both exclude the land cost.$)$

If the land is not rezoned, she will comply with the existing zoning restrictions and simply build $600$ homes, on which she expects to make $$4,000$ over the construction cost on each one $($excluding the cost of land$).$

Draw a decision tree of the problem and determine the best solution and the expected net profit.

$25\mathrm{.}00$ points