Problem 1: The historical demand of product line X was as follows:

1. Using Exponential Smoothing method predict the demand for each quarter or year 2006. Assume \(\alpha =0.1\)
2. Create a Least Squares regression equation and evaluate how much variance the model could explain and if the overall model is significant. Use the regression model to predict the demand of year 2006.
3. Using the MAD as a criterion, which forecasting method is better?

Problem 2: Given data as follows, please develop aggregate plan using level and chase strategies, and determine which strategy can produce the lowest cost.

Inventory at the beginning of Jan: 500 units

Materials: $200/unit

Holding Cost: $5/unit (per month)

Stockout cost: $20/unit

Hiring Cost: $200/hire

Layoff Cost: $500/layoff

Straight-Time Cost: $10/hour

Overtime Cost: $20/hour

Production Time: 2 hours/unit

Working Hours: 8 hours/day

Payment Hours: 8 hours/day

Productive Hours: 7 hours/day

Workers available at the beginning of Jan: 33

Problem 3: Company ABC is planning to make its weekly trek to company XYZ to pick up a supply part X. The trip will take company ABC 3 days. Company ABC currently has 20 units in its inventory. Now, the manager decides to order 36 units of part X from company XYZ. What service level does this order can provide? Assume the company has the following historical demand:

Price: $18.8

Solution: The downloadable solution consists of 13 pages, 580 words and 4 charts.
Deliverable: Word Document