Department of Mechanical Engineering

MET 304: Operations Planning and Control

Tutorial 2: FORECASTING
Q1. The monthly demand for motorcycles for last 14 months is given below.

Demand Demand
Month Month
(1000 units) (1000 units)
January 1.3 August 2.0
February 1.1 September 2.9
March 0.9 October 3.2
April 1.6 November 3.7
May 1.5 December 2.4
June 2.1 January 1.6
July 2.4 February 1.0

(i) Develop a forecast for March using

a) A 3-monnth and 4-maonths moving average
b) A 3- month weighted moving average with weights of 0.1, 0.3, 0.6 for the
earliest to latest period.
c) Develop an exponentially smoothed forecast with α = 0.1 and 0.3
(ii) Determine forecast errors, SAD, MAD, MAPE and MSE for the forecasting
models used in (i) and comment on the results

Q2. The manager of an ice cream parlor needs an accurate forecast of demand for ice
cream. For this collects demand data for last 10 weeks as given below

Week Liters Sold

1 110
2 95
3 135
4 160
5 97
6 105
7 120
8 175
9 140
10 121

(a) Develop exponentially smoothed forecast with α = 0.2 and use it for
forecasting demand for 11th period.
(b) Compute MAD, MAPE and MSE for the forecasting models developed in (a)

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Q3. Table below shows the demand data for a particular model of refrigerator collected
by XYZ Limited. Develop a trend adjusted exponential smoothing model using α = 0.2
and β=0.3 and determine forecast for next January.

Period Month Demand

1 January 37
2 February 40
3 March 41
4 April 37
5 May 45
6 June 50
7 July 43
8 August 47
9 September 56
10 October 52
11 November 55
12 December 54

Q4. Consider the quarterly sales data as given below:

Yea
Quarter 1 Quarter 2 Quarter 3 Quarter 4
r
2011 43 27 10 22
2012 49 35 14 27
2013 58 47 14 32
2014 71 53 18 35
2015 80 63 22 41

(a) Determine the pattern in the time series forecasting

(b) Develop appropriate method for forecasting and forecast for the four quarters of
2016 if expected demand during the year is 180.

Q5. Best Pizza’s delivery service store at Jaipur has randomly selected five weekdays
during the past month and recorded orders for pizza at four different time periods per day
as follows.

Time Period Days

1 2 3 4 5
10:00 AM -03:00 PM 62 49 53 35 43
03:00 PM -07:00 PM 73 55 81 77 60
07:00 PM -11:00 PM 42 38 45 50 29
11:00 AM -02:00 AM 35 40 36 39 20

(a) Compute seasonality indices for the seasons in the data for forecasting
(b) Develop a seasonality adjusted exponential soothing model using α = 0.2 and
γ=0.05
(c) Use the above models to forecast the demand for sixth day if total demand for the
day is expected to be 210.
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Q6. Data for price and units sold are given in a table below

Price/unit Number of units Price/unit Number of units

sold sold
09.90 1143 16.50 410
19.60 361 13.70 605
14.50 532 11.20 910
10.80 997 18.70 360
17.40 390 10.20 1094
15.30 475 12.00 806
12.70 722 19.20 355

(a) Develop a linear regression model to forecast the demand

(b) Estimate the demand if current price for the product is Rs. 13.20 and Rs. 15.10