MAT 540 WEEK 4 HOMEWORK LATEST

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MAT 540 Week 4 Homework Latest

MAT540

MAT 540 Week 4 Homework Latest

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Chapter 15

1. The manager of the Carpet City outlet needs to make an accurate forecast of the demand for Soft Shag carpet (its biggest seller). If the manager does not order enough carpet from the carpet mill, customer will buy their carpet from one of Carpet City’s many competitors. The manager has collected the following demand data for the past 8 months:

Month	Demand for Soft Shag
Carpet (1,000 yd.)
1	10
2	9
3	8
4	9
5	10
6	12
7	14
8	11

9. Compute a 3-month moving average forecast for months 4 through 9.
10. Compute a weighted 3-month moving average forecast for months 4 through 9. Assign weights of 0.55, 0.35, and 0.10 to the months in sequence, starting with the most recent month.
11. Compare the two forecasts by using MAD. Which forecast appears to be more accurate?
12. The manager of the Petroco Service Station wants to forecast the demand for unleaded gasoline next month so that the proper number of gallons can be ordered from the distributor. The owner has accumulated the following data on demand for unleaded gasoline from sales during the past 10 months:

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Month	Gasoline Demanded (gal.)
October	775
November	835
December	605
January	450
February	600
March	700
April	820
May	925
June	1500
July	1200

1. Compute an exponential smoothed forecast, using an ? value of 0.4
2. Compute the MAD.
3. Emily Andrews has invested in a science and technology mutual fund. Now she is considering liquidating and investing in another fund. She would like to forecast the price of the science and technology fund for the next month before making a decision. She has collected the following data on the average price of the fund during the past 20 months:

Month	Fund Price
1	$55 ¾
2	54 ¼
3	55 1/8
4	58 1/8
5	53 3/8
6	51 1/8
7	56 ¼
8	59 5/8
9	62 ¼
10	59 ¼
11	62 3/8
12	57 1/1
13	58 1/8
14	62 ¾
15	64 ¾
16	66 1/8
17	68 ¾
18	60.5
19	65.875
20	72.25

21. Using a 3-month average, forecast the fund price for month 21.
22. Using a 3-month weighted average with the most recent month weighted 0.5, the next most recent month weighted 0.30, and the third month weighted 0.20, forecast the fund price for month 21.
23. Compute an exponentially smoothed forecast, using ?=0.3, and forecast the fund price for month 21.
24. Compare the forecasts in (a), (b), and (c), using MAD, and indicate the most accurate.
25. Carpet City wants to develop a means to forecast its carpet sales. The store manager believes that the store’s sales are directly related to the number of new housing starts in town. The manager has gathered data from county records on monthly house construction permits and from store records on monthly sales. These data are as follows: