889 OU NO Q1: Short-answer question: Could you give two consequences of poor forecasts? Explain. Q2: The following gives the number of pints of type A blood used at Woodlawn Hospital in the past 16 weeks Week Pints Used 1 860 2 3 910 4 881 5 868 6 874 7 886 8 892 9 865 10 892 11 912 12 923 13 901 14 908 15 928 16 899 a) Forecast demands from week 4 to week 17 using a 3-week moving average. b) Use a 3-week weighted moving average, with weights of 0.1, 0.3, and 0.6, using 0.6 for the most recent week. Forecast demands for week 4 until week 17. c) Forecast demands for week 4 until week 17 using exponential smoothing with a = 0.7. d) Which forecast method is the best based on MAD and MSE? 03: A manager has just received an evaluation from an analyst on two potential forecasting methods. The analyst is indifferent between the two methods, saying that they should be in control. The demand and the forecasts using the two methods for nine periods are: Period 1 2 3 4 5 6 7 8 9 Demand 39 47 49 51 Method 1 (Ft) 36 38 40 42 46 46 46 48 52 Method 2 (Ft) 36 38 38 41 52 47 48 52 Conduct a 2s control chart for each method. Do you agree with the analyst? Explain. Q4: The soft goods department of a large department store sells 175 units per month of a certain large bath towel. The unit cost of a towel to the store is $2.50 and the cost of placing an order has been estimated to be $12.00. The store uses an inventory carrying charge of 27% of unit cost of per year. Assume that the department operations 250 days per year and lead time is 7 days. 1) What is the optimal inventory policy of the soft goods department? What is the yearly total cost? 2) What the impact of order quantity on the yearly ordering cost, holding cost and total cost? Please plot. 3) If, through automation of the purchasing process, the ordering cost can be cut to $4.00, what is the cost saving if the department use economic order quantity? 37 37 39 45 49 37