ee IMSE343. EXAM2B February 28,2006 Name yn De ~ ¥ ‘There are 33 questions each worth 3 points except question 33 is worth 4 points. Given: A service company wants to locate a new department store using 3 alternative locations. They want to use the Factor-Rating Method to determine the new site based on the maximum value and the following data Factor Weight Location A Location B Location C Labor 3 90 B35 [70 a] 60 30 Taxes 3 60 19 160 1Ro [80 20 Security 2 20 YO 150 1061 60 1 & 219” ©30 QO 1 Ah, 47O _ Give the letter and score of the location alternative that should be chosen: Given: The Blue Sail Co. has a choice of two locations to build a plant. The fixed and variable costs for the two alternative locations are given below. a = | Fixed $7,000 [$10,000 [$15,000 4 i Variable [$10 37 35 = 96 2 NW _ Which alterative location isthe lowest total cost at 3,000 units? _ e 3 Xz (Over what range of numberof units (9) sltemtive WY} the low-cost chotee (must inexact Galeulated numbers and not picked offofagridy? 4 —~ NC 7000+ 1063000) = 37,009 BE 13,000 * 13000) = 31,056 13000 4 S@o09) = 30,6, WY sg NS 09 aa oo WN sid 15000134 = 7000+ 10% 190015 aera Booos Sx D.2005 3X : = 60 X= 3500 20 I E Given: The Light Truck Co, wants to build a new distribution facility to ship repair pats to three warehouses. The company will use the “Center-of-Gravity Method” to decide where the new distribution facility would be built. The Volume and map coordinates for the three warehouses are shown below: $00 03) 4300944) + 200068) + 18009. Collection Points | Volume | (X,Y) Coordi A 5000 (9,2) “seo $0001 3000 4 Ded07 Keo B 3000 [(7a) zises ws c 2000 TG.8) case : D 1000 (2,9)_a0ce 4 YB" what is (¥) coordinate where the collection center should be located (one decimal)? \ 1 oe pect -Given: The Blue Company's 2004 and 2005 sales demand is listed below. The sales for year 2006 is forecasted to be 4800 units. Month [Jan [Feb | Mar | Apr| May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total ‘2003 | 220 | 210 | 230 | 230] 240 | 260 | 320 | 300 | 250 | 240 | 230 | 150 | 2680 2004 | 20 | 270 | 280 | 285} 300 | 310 | 340 | 320| 310 | 280| 260| 200| 3405 280 2005 [270 | 290 | 300 | 315 | 340 | 350 | 980 | 3@0 | 360 | 310 | 280 | 220 | 3795 [a8 5. OUR What is the seasonal index for the month of May (3 decimals)? 6. XG What is the forecasted sales in units for the month of May in year 2006 (nearest unit)? 3033 _ | yg HBO - Kon Coug)= Yaa % 419 280 2 Given: Robert is the production manager at a company, which manufactures diesel engines. Robert needs a ‘demand forecast for the next year to help decide whether to add new production capacity. The initial forecast for 2005 was 7800 units. Alpha =.6 The actual sales for year 2005 was 7000 units. Use Exponential Smoothing ‘without trend. Pace) 7. 3320 Forecast for year 2006 = 1800+ 0 (7000 78 ) , ~ 7800! ig2 71800 S = 23 sig 320 A, 5: 7000 Given: The Hassick Corp wants to forecast the next months Feb 2006 sales using the FIT method. The initial forecast (step 1) was 78,000 for Jan and the initial Trend (step 2) was 500 units. Alpha = 4 and Beta Demand for Jan was 80,000 units. Use Exponential Smoothing w/Trend: 8. BOJYO Forecast for February (no decimal —round off)? Fis AIT Ch og) (Fa To) * 4(8e000)+ (1-4) (78, 900400) 19,100 2 Fe Ft CBT * 179100 - 8300) + 04900) = Fo 30 1090 2 79,100+ 1040 = BolhOGiven: The JP Holly Co. wants to use a regression line to predict the’h and found a linear relationship exists. (b= 3.71 and a= 25.91) 0) for year 2006 (000) Month x y x8Q xy -ySQ van 1 30 1 30900 Feb 2 35 4 70 1225 Mar 3 45 9 135 2025 ‘Apr 4 40 16 © 1601600 May 5 40 25 200-1600 Jun 6 45 38 270-2028 ° Jul z 55 49 385-3025 10 Aug 8 50 64 = 400-2600 Sep 9 50 81 450-2500 Oct 10 60 100 += 600-3600 Nov 14 70 121. 70-4900 Dec 2 80 1449608400 SUM 78 600 650443032300 4 7 BiSlo.% GA_ What isthe forecast in units forthe sales for March 2008? | PE 2S 14S Whats the “measure ofthe variability around the regression line” in units? 11. _O.FN> _ What is the measure of the strength of the relationship between x and y variables? y#38.91*3-1,(5)= 8. syxQy S+ (Riaksban Reo ose BMS gg re bake ane + AWED~ 089690) 2 2860 ~| 8x8 Ed*) nee ey) Dress) ae \Iapmocy- co] tes eo Given: The forecast of Joe’s Pizza and actual demand for ‘the past six weeks are given below. Also, Joe has determined that most zegent demand probably should be weighted with the highest number if he decides to use the Weighted Moving Average, He used weights of 1,2,3,4. MAD 23 Gas awit Week Feast Demand cere’ | \cvrse | PoC ena ie op big 2 2 7 1 o-| 2 “Ss BS as 80 -s | 3 687 4 4 95 105 © 19 12. =O 80 Whatis shetecing gece the end of week 4? | 13. 78.7 S_ Using the Moving Average Method, what is the forecast for week 4 (n=4)? | 14. la Using the Weighted Moving Average, what is the forecast for week 4 (n=4)? 15,__1OS Using the Naive Method, what is the forecast for week 5 HBO 80. IB TS © 0+ 30.q)+ 389449005) 86 y‘There are 33 questions each worth 3 points except question 33 is worth 4 points. Given: A service company wants to locate a new department store using 3 alternative locations. They want to use the Factor-Rating Method to determine the new site based on the maximum value and the following data: ‘Weight ‘Location A 5 90 To 3 60. 18S 2 20 uO “IO. 1. fh, 2FO _ Give the letter and score of the location alternative that should be chosen: 1¢ Blue Sail Co. has a choice of two locations to build a plant. The fixed and variable costs forthe two alternative locations are given below: $7,000, AR wy $10,000 | $15,000 4 ST 35 NC 700+ 15.00015% = '0@e00)= 37605 AE is,900+ 13909) = 31,006 5000 * S@00q) = 36,009 2 WW _ Which alternative location is the lowest total cost at 3,00 OO, Over what range of numberof unit (x) altemative ie exact lculated numbers and not picked off ofa grid)? WY 8 1§0001 5x = 10,000 47x 3.0607 OK %=2500, Given: The Light Truck Co. wants to build a new distribution facility to ship repair parts to three warehouses. ‘The company will use the “Center-of-Gravity Method” to decide where the new distribution facility would be built. The Volume and map coordinates for the three warehouses are shown below: Collection Points ‘Volume CGY) Coordinates $00 069) 4 390068) + 30008) A 5000 [(9,2) usm 1885 B 3000 |(7.4) zion 2039] c 2000 16,8) cos woe D 1000 [2,9) asso 4005 11,005 4 WR ‘What is (¥) coordinate. where the collection center should be located (one decimal)? ee is the low-cost choice (must $0084 $000 4 30001 Geo./ Given: The Blue Company's 2004 and 2005 sales demand is listed below. The sales for year 2006 is forecasted to be 4800 units ama ae Month [Jan | Feb | Mar | Apr | May | Jun | Jul [Aug | Sep | Oct | Nov | Dec | Total ] 2003 | 220 | 210 | 230 | 2301 240 | 260 | 320 | 300 | 260 | 240 | 230 | 150 | 2880 2004 | 260 | 270 | 280 | 285] 300 | 310 | 240 | 920 | 310 | 280 | 260 | 200 | 3405 |! 2 5 2005 | 270 | 290| 300 [315 | 340 | 350 | 380 | 380 | 350 | 310 | 290 | 220 | 3795 [3s T 5. 1,04 _ Whats the seasonal index for the month of May (3 decimals)? 6 __4\Q___ Whatis the forecasted sales in units for the month of May in year 2006 (nearest unit)? 2033-1. 4Q HBOD. Hoo (ious) = Ya. 4 419 380 i Given: Robert is the production manager at a company, which manufactures diesel engines. Robert needs @ demand forecast for the next year to help decide whether to add new production capacity. The initial forecast for 2005 was 7800 units. Alpha=.6 The actual sales for year 2005 was 7000 units. Use Exponential Smoothing ithout trend. Fs Fuyte Uke fin) 7. 2220 _ Forecast for year 2006 Segoe Gate : -7800) 527800 a ane $30 Ag 521000 Given: The Hassick Corp wants to forecast the next months Feb 2006 sales using the FIT method. The initial forecast (step 1) was 78,000 for Jan and the initial Trend (step 2) was 500 units. Alpha = 4 and Beta =.9 Demand for Jan was 80,000 units. Use Exponential Smoothing w/Tren 8. BOJYO Forecast for February (no decimal — round off)? Fo 1800 Fuad? Ce oe) (Pertti) ” i ~ 4 (B¢000)+ (1-4) (78, 990+809) ae 2 19100 *2 FF )teh, *-9 Caio -pse0) + )(S8) = A¢O+ 3a >= 1040 2 79, {00+ 1040 = BolhOGiven: The JP Holly Co. wants to use a regression line to predict ther sales. They plotted points and found a linear relationship exists. (b= 3.71 and a= 25.91) {Actual sales demand in ( (000) Month x y x8Q xy -ySQ Jan + 30 1 30 800 Feb 2 35 4 70 1225 Mar 3 45 9 135 (2025 Apr 4 40 16 © 160 ©1600 May 5 40 25 © 2001600 Jun 6 45 36 2702028 o Jul ? 55 49 3853025 48 Aug 8 50 64 = 400-2500 Sep 9 50 81 450-2500 Oct 40 60 100 = 600.3600 Nov 4 7 124, 7704900 Dec 2 80 144 9606400 SUM 78 = 6006504430 32300 4 7 Bile, GA What is the forecast in units for the sales for March 2008? eae PE 2S.4S whats the “measure of the variability around the regression line” in units? 11. 0.94% _ What is the measure of the strength of the relationship between x and y variables? 1 BALA -8$028 S? |8y-aSubsxy = [| 38800-/as9 - ir akybdu 00 - (as, ‘ateess 43, WER S.e45 nSxy- Exe nag, + LAUBQ)~ 08)(690) ~ 6360 _* r Jeae- er} narai) (Rass WAG we] Se Feo ai : The forecast of Joe’s Pizza and actual demand for the past six weeks are given below. Also, Joe has determined that most regent demand probably should be weighted with the highest number ifhe decides to use the Weighted Moving Average. He used weights of 1,2,3,4. MAD? 25 Cas [Week Feast Demand ecoe’ | ewe aa 1 fF 4 6 =I Tie 22 03 7 oan S85, 80 2S ~ 4 4 95 105, . as 12, _-©.80 _ Whatis the tracking signal at the end of week 4? | 13: 78.15 Using the Moving Average Method, what isthe forecast for werk 4 (ne4)? | 14. Qo Using the Weighted Moving Average, what is the forecast for week 4 (14)? 15, __10S_ Using the Naive Method, what is the forecast for week 5 a ae © 0+ 30a)+ 3¢B9+4005) Haiicaeee HSS Saat rreay| “8# Given: The Gibson Electric Company makes electrical contacts. The company uses economic forecasts from the federal government to predict the yearly sales. The company wants to forecast the yearly sales for 2006 for a siven number of housing starts that are predicted by the federal government. ‘To forecast the 2006 sales for a certain number of housing starts, they use a.regrgssion line for the data. Housing starts are in millions of houses and sales are in millions of dollars. The previous company data for the past 4 years is as follows: ‘Year | Housing Starts « | Salesy] x> pe yn [2002 [14 7 4g” Te 2003 [1.0 4 ie 4 2004 [4.6 9 | 81 | wig 2005 [2.0 2 Yaa ad c 3 aqo Sad : 16420. armlhiears _ Whatisforcested sles filions of dolars) for housing starts of 3.0 million? . = 4 (8) 032 2-4 bs a sy) a 8.08 YH *8.08 GL) a Y= AQ mitog os Y > 8.08(g) = B= 10A2 -4ua 6 by 17. Forecast with time horizon of about 3 month ~3 year is typically called: a. long-range forecast d._ strategies forecast medium-range forecast e. allof the above ©. short-range forecast 18. Given forecast ecors of-1, 4, 8, -3 what isthe Mean Absolute Deviation 14 4+ a2 b.3 7) as 16 Ey 19, Forecasts ‘Are rarely accurate 4. all of the above Become more accurate with longer time horizons ©. none of the above %. More accurate for individual items than for groups of items 20. Primary purpose of the Mean Absolute Deviation is: a. estimate the trend line measure forecast accuracy b. eliminate forecast errors © all ofthe above ©. seasonally adjust the forecast 21. Which of the following would be an advantage when using a sales force composite to develop a demand forecast? 8. Sales staff is east affected by the changing customer needs Sales force can easily distinguish between customers © Sales staff often is aware of customers” future plans Sales people least likely to be influenced by recent events © Sales people are least likely to be biased by sales quotas22. If two variables were perfectly correlated, then the correlation coefficient (2) would equal ~O ‘a “bagreater than one ‘ends jovingaverage udalboftheabove Soweraed moving average ¢. none of the above . exponential smoothing Js forecasting model is NOT well suited for data series that have trends and always lags behind the 24, Which forecasting technique is a quanitative method? 1 exponential smoothing TIL. Regression analysis IL sales force composite TK Consumer market survey alten Colam ctv anem ema 25. An approach to location analysis that includes both qualitative and quantitative considerations is: Pr Ax locational cost-volume WX make or buy analysis Cb. factor-rating ¢. “none of the above . Wansportation model 26. Community attitudes, zoning restrictions, quality of the labor force are likely to be considered in which of the following location decision methods? a.center-of-gravity 4, all of the above b. locational break-even analysis €. none of the above G factor-rating > 27. The crossover chart for locational break-even analysis shows where 2, Fixed costs are equal for alternative locations 4, Fixed costs = variable costs b, Variable costs are equal for alternative locations ©. None of the above @)Toial costs are equal for alternative locations 28. Center-of-gravity does NOT take into consideration location of markets and warehouse ‘combination of volume and distance alue of goods shipped to markets and warehouses "None of the above , Yolume of goods shipped to markets and warehouses 29. Centet-of-gravity method is used primarily to determine what type of locations a. service locations 4. supplier locations bb, manufacturing locations . telemarketing locations listribution centers 30. Which of the following is true regarding the two smoothing constants of the Forecest Including Trend (FIT) Model: a. They are called alpha and bets, Producer’s Risk and Consumer's Risk Alpha is always smaller than Beta © Their values are determined independently All of the above are true ©. None of the above are true 31. Explain what is meant by the location strategy “Clustering” and why do companies follow this strategy. Close 4 a Coy petror ng sherrct her reasiam- + leary fp net « roe loeaen CHO -O bnaed32, Explain how seasonal pattems are different from cyclical pattems? » fliso, srasonal patiens O€ Show sre demand Sr a product wn velahen to the Certain times of the yr, i.e, Summer Christmas The duraton of the aycles ore di ration tha, the 33. List the seven steps to do a forecast L.Detenmne use of fore cost A.Select ser to be forensic! 3S.Determne Yogi os Wad: S Collect dota 6 preform forecast, analyr> data. almpimer = NOidocte me RTO Bonus! Explain the purpose of the tracking signal, what it is and explain the use of upper and lower control limits A\b it determmes Ane fore cast accuracy. itis expected to dewate upto the upper + lowe v Conmtol Sirs, Bonus? A firm is considering use of several competing forecast techniques that they have judged all appropriate techniques for the forecast on hand. It is your task to determine the forecast accuracy of each of the techniques and then to recommend one technique. How would you go about the process of determining whieh technique: jot use the tracking signal in this answer). andate ecor