OPRE 3310: Homework Assignment (return before Da 16%, 2020, 23.59pm. on Learning) Q1. (10 points) Dell uses the CRS chip in some of its laptop computers. The prices for the chip during the past 6 months were as follows: Month Price per Chip 1.78 2 1.67 3 4 1.75 5 1.70 6 1.67 a. Use nave forecast to forecast the price per chip from month 2 to month 6. (2.5 points) 1.70 Forecast Month Price per Chip 1 1.78 2 1.67 3 1.70 4 1.75 5 1.70 6 1.67 1.67 1.70 1.70 b. Use weighted moving average F, = 0414-1+0.34-3 +0.24-3+0.14- to forecast price per chip from months to month 6. (2 points) Forecast Month 2 3 4 5 6 Price per Chip 1.78 1.67 1.70 1.75 1.70 1.67 c. Use exponential smoothing with a = 0.5 to forecast price per chip from month 2 to month 6. Assume month 2 forecast is done using a naive forecast. (2.5 points) Month Price per Chip Forecast Errer 1 1.78 2 1.67 3 1.70 4 1.75 Page 1 of 2 5 1.70 6 1.67 d. Compute the MSE for weighted moving average forecast in part band exponential smoothing forecast in partc. Which forecast is better? points) Month Weighted Squared exponential Squared moving average smoothing 1 error 1.78 2 1.67 3 1.70 1.75 5 1.70 6 1.67 MSE Price per Chip CITAT Q2. (10 points) Betty bakes and sells bagels all year round. Betty has to plan and manage inventories of paper take-out bags with her logo printed on them to satisfy customer demand. Daily demand for take-out bags is normally distributed with a mean of 90 bags and a standard deviation of 30 bags. Betty's printer charges her SIO per order for print setup independent of order size. Bags are printed at 5 cents (50.05) each bag. It takes 4 days for an order to be printed and delivered. Betty has a storage room big enough to hold all reasonable quantities of bags; its operating expenses may be regarded as fixed. The only holding cost is the opportunity cost of capital, which is estimated to be 50.0125 per unit per year. Assume 360 days per year. c) What is the optimal order quantity per order for Betty? (3 points) (ii) How many times per year does Betty need to order? (1 point) (ii) How many days will clapse between two consecutive orders? (1 point) (iv) What is Betty's total annual cost of placing orders & carrying inventory! (2 points) (v) If Betty wants to make sure the bags do not run out with 99% probability during the order lead time, what is her optimal reorder point? (Use -2.33 for 99% service level) (3 points) D=90 0:30 Land ac: u dans H=0.0125 5- $10 Page 2 of 2