Homework $2$

PART $1.$

Below is the sales data for Forever Young Boutique between March of Year $1$ and July of

Year $5.($You can find the Excel sheet containing this data on Blackboard.$)$

Month Year $1$ Year $2$ Year $3$ Year $4$ Year $5$

January $6381\mathrm{.}0711016\mathrm{.}5511965\mathrm{.}6810580\mathrm{.}74$

February $4405\mathrm{.}838264\mathrm{.}1412761\mathrm{.}9813420\mathrm{.}87$

March $4566\mathrm{.}49126\mathrm{.}956843\mathrm{.}9518126\mathrm{.}734476\mathrm{.}27$

April $6941\mathrm{.}8910970\mathrm{.}4520109\mathrm{.}6819092\mathrm{.}919108\mathrm{.}79$

May $7047\mathrm{.}2310189\mathrm{.}2811148\mathrm{.}6415384\mathrm{.}0118109\mathrm{.}54$

June $6784\mathrm{.}377043\mathrm{.}858365\mathrm{.}41223713743\mathrm{.}6$

July $5814\mathrm{.}236717\mathrm{.}379469\mathrm{.}0813252\mathrm{.}5318339\mathrm{.}25$

August $6906\mathrm{.}389139\mathrm{.}721022113819\mathrm{.}77$

September $8075\mathrm{.}1311315\mathrm{.}1915161\mathrm{.}4121755\mathrm{.}64$

October $7913\mathrm{.}5610838\mathrm{.}417731\mathrm{.}0824838\mathrm{.}1$

November $9054\mathrm{.}1811150\mathrm{.}9417508\mathrm{.}9915955\mathrm{.}6$

December $14114\mathrm{.}5817592\mathrm{.}227566\mathrm{.}8919370\mathrm{.}7$

$1)$ Develop a forecast for the sales in August of Year $5$ by using three different forecasting

techniques: Three$-$month simple moving average, Weighted moving average with weights $0\mathrm{.}5,$

$0\mathrm{.}3,0\mathrm{.}2($the weight $0\mathrm{.}5$ is given to the most recent observation$),$ and Exponential smoothing

method with a smoothing constant of $0\mathrm{.}3.(15$ points$)$

$2)$ Which forecasting method you considered in Question $1$ is the most accurate according to the

Mean Absolute Deviation $($MAD$)$ criterion? Please justify your answer. $(5$ points$)$

$3)$ Calculate a $95\%$ confidence interval of the forecast made for August of the fifth year. While

developing the confidence interval, use the forecasting method identified in question $2$ as the

most accurate one. $(5$ points$)$

$4)$ Do you see any major peculiarities in the sales data that were not captured by the forecasting

methods in Question $1?(5$ points$)$

PART $2.$

$5)$ What strategies do supermarkets, airlines, hospitals, banks, and cereal manufacturers use to

influence demand? Please provide ONE strategy for each and explain that strategy in $1-2$ sentences.

$(15$ points$)$

$6)$ Schedule the following activities using CPM:

Activity Immediate Predecessor Time $($Weeks$)$

A $-1$

B A $4$

C A $3$

D B $2$

E C$,$ D $5$

F D $2$

G F $2$

H E$,$ G $3$

a$)$ Draw the network $(5$ points$)$

b$)$ What is the critical path? $(5$ points$)$

c$)$ How many weeks will it take to complete the project? $(5$ points$)$

d$)$ Which activities have slack, and how much? $(5$ points$)$

$7)$ NORAN Inc. is a fabrication and assembly shop that produces radios, each of which consists

of two identical electronic receiver boards and an aluminum chassis. These components are put

together in radio assembly. The electronic boards are obtained from a supplier who has a oneweek

delivery lead$-$time. The aluminum chassis is fabricated internally and the fabrication leadtime

is one week. The lead$-$time for assembling the radio is also one week. Only one shipment of

completed radios is made in a week, at the beginning of the week.

Radio

Assembly

Lead

Time:

$1$

week

Electronic Boards

Lead

Time:

$1$

week

Used:

$2$

per

radio

Chassis

Lead

Time:

$1$

week

Used:

$1$

per

radio

It is the beginning of week $1.$ NORAN is planning fabrication and purchasing based on the

master schedule shown below. $($The only relevant weeks are those numbered $4,5,6$ and $7.)$ The

master schedule requires $50$ radios to be shipped at the beginning of week $4,$ another $50$ to be

shipped at the beginning of week $5,$ and so forth. There are currently $10$ electronic boards, and no

chassis units or assembled radios, in inventory.

a$)$ Using MRP logic, determine the schedule of planned order releases for radio assembly,

electronic board purchase, and chassis fabrication that is required to meet the radio shipping

master schedule. $(20$ points$)$

Radio Shipping Master Schedule

Week $1234567$

Radio Shipment $000505010080$

Radio Assembly Requirements

Week $1234567$

Requirements

Initial Inventory

Scheduled Receipts

Planned Order Release

Electronic Board Requirements

Week $1234567$

Requirements

Initial Inventory

Scheduled Receipts

Planned Order Release

Chassis Fabrication Requirements

Week $1234567$

Requirements

Initial Inventory

Scheduled Receipts

Planned Order Release

b$)$ NORAN employees work $40$ hours per week. Currently a single worker performs both chassis

fabrication and radio assembly. Fabrication of each chassis takes $20$ minutes, and assembly of a

radio also takes $20$ minutes. Show that under the plan you generated in part $($a$),$ the capacity of

the worker is exceeded in at least one week. Furthermore, show how the chassis fabrication plan

devised in part $($a$)$ can be modified so as to meet the master schedule requirements without

exceeding the worker's capacity, and without changing the plans for electronic board purchase or

radio assembly. $(15$ points$)$

Chassis Fabrication Requirements

Week $1234567$

Requirements

Initial Inventory

Scheduled Receipts

Planned Order Release

Assembly Ops from

part $($a$)$