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# Forecast inventory for next year.

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Winter Historical Inventory Data

Typical Seasonal Demand for Winter Highs

Actual Demands (in units)

Month Year 1 Year 2 Year 3 Year 4 Forecast
1 55,200 39,800 32,180 62,300
2 57,350 64,100 38,600 66,500
3 15,400 47,600 25,020 31,400
4 27,700 43,050 51,300 36,500
5 21,400 39,300 31,790 16,800
6 17,100 10,300 31,100 18,900
7 18,000 45,100 59,800 35,500
8 19,800 46,530 30,740 51,250
9 15,700 22,100 47,800 34,400
10 53,600 41,350 73,890 68,000
11 83,200 46,000 60,200 68,100
12 72,900 41,800 55,200 61,100
Avg.

Convert the data from your chosen source into an index.

Use the time series data from your index to forecast inventory for next year.

#### Solution Preview

This shows seasonal patterns and Seasonal patterns are regularly have upward or downward movements in demand measured in periods of less than one year. If the weighted moving average method is used, high weights are placed on prior periods belonging to the same season. Here we use the Multiplicative seasonal method, which is a method whereby seasonal factors are ...

#### Solution Summary

The forecasting inventory for the next year are examined. The typical seasonal demand for winter highs are determined.

\$2.19

## Forecasting

1. The annual demand for a product is 1,000 units. The company orders 200 units each time an order is placed. The lead-time is 6 days, and the company has determined that 20 unites should be held as a safety stock. There are 250 working days per year. What is the reorder point?

a. 20
b. 24
c. 44
d. 120

2. Mark Achin sells 3,600 electric motors each year. The cost of these is \$200 each, and demand is constant throughout the year. The cost of placing an order is \$40, while the holding cost is \$20 per unit per year. There are 360 days per year and the lead-time is 5 days. If Mark orders 200 units each time he places an order, what would his total ordering cost be for the year?

a. \$2,720
b. \$2,000
c. \$720
d. \$200

3. Enrollment in a particular class for the last four semesters has been 120, 126, 110, and 130. Suppose a one-semester moving average was used to forecast enrollment (this is sometimes referred to as a naive forecast). Thus, the forecast for the second semester would be 120, for the third semester it would be 126, and for the last semester it would be 110. What would the MSE be for this situation?

a. 230.67
b. 196.00
c. 100.00
d. 42.00

4. Daily demand for newspapers for the last 10 days has been as follows: 12, 13, 16, 15, 12, 18, 14, 12, 13, 15. Forecast sales for the next day using a two-day moving average is:

a. 13
b. 14
c. 15
d. 28

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