Homework Assignment Four

Forecasting

Each question is worth one point.

An electronics manufacturing company markets a certain piece of specialty equipment. The company has several competitors who currently market similar pieces of equipment. While customers have repeatedly indicated they prefer the company’s equipment, they have historically proven to be unwilling to wait for the company to manufacture this piece of equipment on demand due to its long lead time and will purchase alternate equipment from the company’s competitors in the event the company does not have the equipment available in inventory for immediate delivery. Thus, the key to the company successfully maintaining market share for this particular piece of equipment has been to have it available in stock for immediate delivery. Unfortunately, it is a rather expensive piece of equipment to maintain in inventory and customer demand tends to fluctuate. Thus, the president of the company is very interested in accurately forecasting market demand in order to ensure he has adequate inventory available to meet customer demand without incurring undue inventory costs. His sales department has provided the following historical data regarding market demand for this piece of equipment for the past 24 months. Use this data to answer questions 1 through 9.

1. What is the projected demand for the equipment for time period 25 based upon using a 3-month moving average forecast model?
2. What is the mean absolute percent error (MAPE) for months 4 through 24 based upon using a 3-month moving average forecast model?
3. What is the projected demand for the equipment for time period 25 based upon using a 3-month weighted moving average forecast model for which the weighting factor for actual demand one month ago is 3, the weighting factor for actual demand two months ago is 2, and the weighting factor for actual demand three months ago is 1?
4. What is the mean absolute percent error (MAPE) for months 4 through 24 based upon using a 3-month weighted moving average forecast model for which the weighting factor for actual demand one month ago is 3, the weighting factor for actual demand two months ago is 2, and the weighting factor for actual demand three months ago is 1?
5. What is the projected demand for the equipment for time period 25 based upon using an exponential smoothing forecast model for which alpha = 0.25?
6. What is the mean absolute percent error (MAPE) for months 1 through 24 based upon using an exponential smoothing forecast model for which alpha = 0.25?
7. What is the projected demand for the equipment for time period 25 based upon using a regression forecast model for which the desired confidence level is 95%?
8. What is the mean absolute percent error (MAPE) for months 1 through 24 based upon using a regression forecast model for which the desired confidence level is 95%?
9. Based upon comparing the mean absolute percent error (MAPE) values for the four forecasting models, which of the forecast models provides the greatest degree of forecasting accuracy?
10. What is the seasonal index for September?
11. Which month evidences a seasonal index that is closest to the index for an average season?
12. Assuming that the estimated annual demand for lawn tractors for 2013 is 725,000 units, what is the forecasted demand for lawn tractors for August 2013 taking into account the seasonal index?
    Quarterly sales figures for a company are shown in the following table. Use this data to answer questions 13 through 15.

    Quarter	Year 1	Year 2	Year 3
    1	$108	$118	$124
    2	$125	$137	$147
    3	$150	$162	$169
    4	$141	$155	$170

    All figures shown are in $ million.
13. What is the index seasonal index for the first quarter of year four using a seasonal variation with trend forecasting model?
14. What is the adjusted seasonal index for the second quarter of year four using a seasonal variation with trend forecasting model?
15. If the projected annual demand for year four is $725 million, what is the forecasted demand for the third quarter of year four using a seasonal variation with trend forecasting model?

Price: $27.25

Solution: The downloadable solution consists of 17 pages, 1025 words.
Deliverable: Word Document