ANSWER FOR PART G

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Part C (12 marks) (Hint - please refer to reading instructions & end-of chapter exercises for Chapter 9 covered in Week 4) Year 1 2 3 4 5 6 7 Requirement (no. of units) 10001 10005 10008 10012 10017 10029 10043 10051 10060 10070 10081 10093 10106 10134 10164 10180 8 9 10 11 12 13 14 15 16 17 10197 18 19 10215 10234 10274 20 In the above data table, the operations manager of DBS Manufacturing Company has provided you historical data on their annual requirement of the special component over the past twenty years. (a) What is the forecast requirement for next year using a two-period moving average? Page 4 of 6 MMM267 Business Logistics T1 2020 (1 mark) (b) What is the forecast requirement for next year using a three-period moving average? (1 mark) (c) What is the forecast requirement for next year using a four-period moving average? (1 mark) (d) What is the forecast requirement for next year using a five-period moving average? (1 mark) (e) Compute the MSE for each of the above moving averages. Compare and interpret your results. (2 marks) (f) Using the same data table, find the best single exponential smoothing model by evaluating the MSE; starting with an alpha of 0.15 and changing alpha in increments of 0.15. How does the best single exponential smoothing model compare with the best moving average model you found in (e)? (3 marks) (g) If the DBS operations manager asked for your advice as to whether it is better to use time-series forecasting models or regression-based forecasting models, what would your advice be and why