Part I: Calculation

7. Assuming that the exponential smoothing constant = 0.16, average first 4 quarters of data is used for previous forecast and theres the level effect only, please forecast the value of the third quarter in this year through weighted moving Average Forecasting method according to the time series data given. Moreover, if forecast errors are normally distributed, whats the forecast range of the actual time series value of quarter 3 at the confidence level of 95%? (Z_@95%=1.96)

8. The inventory is reviewed at the time interval (T) to determine the quantity on hand. The

replenishment quantity (Q) to be ordered is the difference between a target level called MAX

and the quantity on hand. Try to find MAX and TC (total cost). (keep two decimals)

Given:

d = 100 units/week; C = $5/unit

S_d = 10 units/week; LT = 2 weeks

I = 10%/year; P = 0.99

S = $10/order; k = $3/unit

Z_99%=2.33; E(Z_99%) = 0.0034

9. As the inventory manager of TCC, you apply the method of push inventory control to manage the stock. Warehouses are to have a 95% in-stock probability. All of the purchased radios are to be allocated to the warehouses based on the anticipated demand levels at each

warehouse. Account is taken of the inventory already on hand. A total of 5000 radios is

purchased. The next purchase will be made in one month. Further information is given

below. How should the allocation to the warehouses be made? (Z_@95%=1.65, one-tailed)

Warehouse	Current stock level	Forecasted demand	Forecast error (std.dev)
1	350 units	2200 units	70 units
2	300 units	1600 units	60 units
3	200 units	1200 units	40 units