Chapter 4 Internet Homework Problems

4.50

Registrationnumbersforanaccountingseminaroverthepast10weeksareshownbelow:
Week
Registrations

10

22

21

25

27

35

29

33

37

41

37

a) Startingwithweek2andendingwithweek11,forecastregistrationsusingthenaive
forecastingmethod.
b) Startingwithweek3andendingwithweek11,forecastregistrationusingatwoweek
movingaverage.
c) Startingwithweek5andendingwithweek11,forecastregistrationsusingafourweek
movingaverage.
d) Plot the original data and the three forecasts on the same graph. Which forecast
smoothesthedatathemost?Whichforecastrespondstochangethebest?
4.51 Given thefollowingdata, useexponential smoothing( = 0.2)todevelop ademand forecast.
Assumetheforecastfortheinitialperiodis5.
Period

Demand

13

4.52Calculate(a)MADand(b)MSEforthefollowingforecastversusactualsalesfigures:
Forecast

100

110

120

130

Actual

95

108

123

130

4.53 SalesofindustrialvacuumcleanersatLarryArmstrongSupplyCo.overthepast13monthsare
shownbelow:
Month

Jan.

Feb.

March

April

May

June

July

Sales(inthousands)

11

14

16

10

15

17

11

Month

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Sales(inthousands)

14

17

12

14

16

11

a) Usingamovingaveragewith3periods,determinethedemandforvacuumcleanersfor
nextFebruary.
b) Usingaweightedmovingaveragewith3periods,determinethedemandforvacuum
cleanersforFebruary.Use3,2,and1fortheweightsofthemostrecent,secondmost
recent,andthirdmostrecentperiods,respectively.Forexample,ifyouwereforecasting
thedemandforFebruary,Novemberwouldhaveaweightof1,Decemberwouldhavea
weightof2,andJanuarywouldhaveaweightof3.
c) UsingMAD,determinewhichisthebetterforecast.
d) WhatotherfactorsmightArmstrongconsiderinforecastingsales?

4.54PassengermilesflownonNortheastAirlines,acommuterfirmservingtheBostonhub,areshownfor
thepast12weeks:
Week

ActualPassengerMiles

17

21

19

23

18

16

Week

10

11

12

ActualPassengerMiles

20

18

22

20

15

22

(inthousands)

(inthousands)

a) Assuminganinitialforecastforweek1of17,000miles,useexponentialsmoothingto
computemilesforweeks2through12.Use=.2.
b) WhatistheMADforthismodel?
c) ComputetheRSFEandtrackingsignals.Aretheywithinacceptablelimits?

4.55 Giventhefollowingdata,useleastsquaresregressiontoderiveatrendequation.Whatisyour
estimateofthedemandinperiod7?Inperiod12?
Period

Demand

11

10

13

4.56 JoeBarrow,ownerofBarrowsDepartmentStore,hasusedtimeseriesextrapolationtoforecast
retailsalesforthenext4quarters.Thesalesestimatesare$120,000,$140,000,$160,000,
and$180,000fortherespective quarters.Seasonal indicesfor the4quarters havebeen
foundtobe1.25,.90,.75,and1.10,respectively.Computeaseasonalizedoradjustedsales
forecast.
4.57ThedirectoroftheRileyCounty,Kansas,librarysystemwouldliketoforecasteveningpatronusage
fornextweek.Belowarethedataforthepast4weeks:

Week 1
Week 2
Week 3
Week 4

Mon

Tue

Wed

Thu

Fri

Sat

210
215
220
225

178
180
176
178

250
250
260
260

215
213
220
225

160
165
175
176

180
185
190
190

a)Calculateaseasonalindexforeachdayoftheweek.
b)Ifthetrendequationforthisproblemisy=201.74+.18x,whatistheforecastforeachdayofweek5?
Roundyourforecasttothenearestwholenumber.

4.58 Acarefulanalysisofthecostofoperatinganautomobilewasconductedbyafirm.Thefollowing
modelwasdeveloped:
Y=4,000+0.20X
whereYistheannualcostandXisthemilesdriven.
a) Ifthecarisdriven15,000milesthisyear,whatistheforecastedcostofoperatingthis
automobile?
b) Ifthecarisdriven25,000milesthisyear,whatistheforecastedcostofoperatingthis
automobile?
4.59Thefollowingmultipleregressionmodelwasdevelopedtopredictjobperformanceasmeasuredbya
company job performance evaluation index based on a preemployment test score and
collegegradepointaverage(GPA):
Y=35+20X1+50X2
where

Y =jobperformanceevaluationindex
X1 =preemploymenttestscore
X2 =collegeGPA

a) Forecastthejobperformanceindexforanapplicantwhohada3.0GPAandscored80
onthepreemploymentscore.
b) Forecastthejobperformanceindexforanapplicantwhohada2.5GPAandscored70
onthepreemploymentscore.
4.60 A study to determine the correlation between bank deposits and consumer price indices in
Birmingham,Alabama,revealedthefollowing(whichwasbasedonn=5yearsofdata):

x=15
x2=55
xy=70
y=20
y2=130
a) Whatistheequationoftheleastsquareregressionline?
b) Findthecoefficientofcorrelation.Whatdoesitimplytoyou?
c) Whatisthestandarderroroftheestimate?

4.61TheaccountantatRickWingCoalDistributors,Inc.,inSanFrancisconotesthatthedemandforcoal
seemstobetiedtoanindexofweatherseveritydevelopedbytheU.S.WeatherBureau.
WhenweatherwasextremelycoldintheU.S.overthepast5years(andtheindexwasthus
high),coalsaleswerehigh.Theaccountantproposesthatonegoodforecastofnextyears
coaldemandcouldbemadebydevelopingaregressionequationandthenconsultingthe
Farmers Almanac tosee how severe next years winter wouldbe. For the data in the
followingtable,derivealeastsquaresregressionandcomputethecoefficientofcorrelation
ofthedata.Alsocomputethestandarderroroftheestimate.
CoalSales,y

(inmillionsoftons)
WeatherIndex,x

4.62Giventhefollowingdata,useleastsquaresregressiontodeveloparelationbetweenthenumberof
rainysummerdaysandthenumberofgameslostbytheBocaRatonCardinalbaseballteam.
Year
RainyDays
GamesLost

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

15
25

25
20

10
10

10
15

30
20

20
15

20
20

15
10

10
5

25
20