Forecasting: MA(n)= data from previous n periods averaged (ex: MA(3)= a+b+c/3) Change in MA= number added-number eliminated/n

new forecast is previous average plus change Noise: forecast pulled off for 1/n periods Larger n longer inaccuracy smaller shift Weighted MA= more weight on recent data, catch a trend faster, more effected by noise WMA(n)= weight*data1 + weight* data2. Exponential smoothing= * most recent data + (1-) * previous forecast 0<<1 =1 forecast the same always =0 todays demand means nothing Regression: y= +x R2- explains % of variance in data TSS- how much data point differs from average value, variance of y, sum of squares SSR- variation predicted by regression line SSE- what is not explained by regression line - for every 1 of x, y changes by T-stat- how many standard errors is away from 0 P value- if true value is 0, probability of observed value t distance away (small p good) Log linear: ln y= ln yo + ln (1+g) t (Yt= Yo (1+g)t) A/Yt-1 ln(A/Yt-1) linear regb=t from reg, C, exp(intercept) % of data in log form is explained by regression A- limit Yt= A/(1+Cebt) e = ln of growth rate backwards solve -1 MAD- abs value of (forecast- data) average MSE= average of squares error (forecast- data) MAPE- average of absolute value of percentage forecast error ( (F-D)/data#) Linear probability model- loans/defaults/bank payments-- 0,1 dichotomous.Y=pred Y- 0.52x(if x increase by .1, prob of bankrupt drops by .52 Process analysis: Process rate (# of units/unit of time)= Cycle time (amount of time for 1 unit to pass through step)= 1/to get to time *60 Bottleneck- smallest process rate or longest cycle time Throughput time- sum of all cycle times plus queues Process capacity- # of units produced in x time- (bottleneck) * T Capacity utilization- units/hr* time asking for capacity Effective capacity utilization- average sales/capacity utilization Queuing: = average arrival rate of customers= expected #/time 1/= how many minutes per arrival = average service rate= expected #/time 1/= how many minutes per single service /= probability W= waiting time system, L= expected # system, Wq= expected waiting time in queue, Lq= expected # in queue Littles formula- L=W- expected customers in system and in queue, applies to both W= Wq + 1/ Pn= probability that n people are in the system P1= (/) * P0 M/M/1 queue- Lq= (/) * L Wq= (/) * W, where W = e-(-k)*t or Lq/ Expected # in system L= (/)/(1-/) Probability of 4 or more in system? P(n>k), p(n>3), (/)k+1, (/)4 Probability waiting time exceeds 10 min- P(w>1/6)= (/) e-(-k)*1/6 example: = 6 (arrival per hour) = 10/hour (6 minutes per use) /= 6/10= 0.6 A. What is the expected number of customers in the system? B. What is expected number of customers waiting for service? Lq= 0.6 x 1.5 = 0.9 customers waiting for service L= 0.6 = 1.5 customers is expected in the system 1- 0.6 C. What is the expected time in the system? D. What is the expected time in the queue? Wq= 0.6 x 0.25 = 0.15= 9 minutes expected in the queue W= 1.5 = 0.25= 15 minutes expected time in the system 6 M/M/1 with finite/state dependent- buffers, people leave when lines too long M/M/c- # of servers increase from 1 M/G/1- service time is random, arrivals random, time has mean and variance of E(T) and V(T) M/D/1- dr office, scheduled arrivals M/G/- infinite # of servers, random arrivals, general service distribution