# Production & Operation Management

Forecasting Assignment (No: 7)
2009--2011, Sec: A, Group No: 5
PGDM 2009
Submitted To: Mr. N Raju Gundala
Group Members Name
Amit Shankar Choudhary
Arup Chakraborty
Ashvani Kumari
Bala Kishore Swami
Bornali Dey
Mini Dingra

Roll Number
05
12
14
15
17
41

1. The number of cans of soft drinks sold in a machine
each week is recorded below. Develop forecasts using
a three period moving average.
338, 219, 278, 265, 314, 323, 299, 259, 287, 302
Let Xt denote the number of cans of soft drinks sold in a machine of the tth week.
Now the 3 month moving average of the t+1th week is given by

Xt + Xt-1 + Xt-2
Ft=
3

, t=3, 4, & 5

Now the three periods moving average forecast is given in the following table
Three-period moving average
Forecast
Week (t)
Xt
(Ft)
1
338
2
219
3
278
278.33
4
265
254.00
5
314
285.67
6
323
300.67
7
299
312.00
8
259
293.67
9
287
281.67
10
302

2. Use a four period moving average to forecast
attendance at baseball games. Historical records show
5346, 7812, 6513, 5783, 5982, 6519, 6283, 5577,
6712, and 7345
Let Xt denote the number of viewers of baseball game of the tth period. Now the 4 period moving average of the t+1th period is given by

Xt + Xt-1 + Xt-2 + Xt-3
Ft=
4

, t= 4, 5, 6 & 7

Now the four periods moving average forecast is given in the following table

Four period moving average
Period
(t)

Xt

Forecast
(Ft)

1

5346

2

7812

3

6513

4

5783

5

5982

6363.5

6

6519

6522.5

7

6219

6199.25

8

6283

6125.75

9

5577

6250.75

10

6712

6149.5

11

7345

6197.75

3. A hospital records the number of floral deliveries its
patients receive each day. For a two week period, the
records show
15, 27, 26, 24, 18, 21, 26, 19, 15, 28, 25, 26, 17, 23
Use exponential smoothing with a smoothing constant
of .4 to forecast the number of deliveries.

The formula is Ft=α*At-1+ (1- α) Ft-1
Here,
α= 0.4
A=actual data
F=forecasted data
t=period number

Week

1
2

α

0.4

Day

Delivery

1

15

2

27

15

3

26

19.8

4

24

22.28

5

18

22.968

6

21

20.9808

7

26

20.98848

8

19

22.993088

9

15

21.3958528

10

28

18.83751168

11

25

22.50250701

12

26

23.5015042

13

17

24.50090252

14

23

21.50054151

Ft by exponential smoothing

4. The number of girls who attend a summer basketball
camp has been recorded for the seven years the camp
has been offered. Use exponential smoothing with a
smoothing constant of .8 to forecast attendance for
the eighth year.
47, 68, 65, 92, 98, 121, 146
A

Ft=Ft-1+α (At-1-Ft-1)
Here; α= 0.8
α

0.8

Year

Attendance

1

47

2

68

47

3
4

65
92

63.8
64.76

5

98

86.552

6

121

95.7104

7

146

115.94208

8

Ft by exponential smoothing

139.988416

5. The number of pizzas ordered on Friday evenings
between 5:30 and 6:30 at a pizza delivery location for
the last 10 weeks is shown below. Use exponential
smoothing with smoothing constants of .2 and .8 to
forecast a value for week 11. Compare your forecasts
using MSE. Which smoothing constant would you
prefer?
58, 46, 55, 39, 42, 63, 54, 55, 61, 52

Ft=Ft-1+α (At-1-Ft-1)
α

Weeks
1
2
3
4
5
6
7
8
9
10
11

No of Pizza
58
46
55
39
42
63
54
55
61
52

α

Weeks
1
2
3
4
5
6
7
8
9
10
11

No of Pizza
58
46
55
39
42
63
54
55
61
52

0.2

MSE

84.12344725

Ft by exponential smoothing

Error

Squared
Error

58
55.6
55.48
52.184
50.1472
52.71776
52.974208
53.3793664
54.90349312
54.3227945

-12
-0.6
-16.48
-10.184
12.8528
1.28224
2.025792
7.620634
-2.90349

144
0.36
271.5904
103.713856
165.1944678
1.644139418
4.103833227
58.07405647
8.430272298

0.8

MSE

107.1703721

Forecast using exponential smoothing

Error

Squared Error

58
48.4
53.68
41.936
41.9872
58.79744
54.959488
54.9918976
59.79837952

-12
6.6
-14.68
0.064
21.0128
-4.79744
0.040512
6.008102
-7.79838

144
43.56
215.5024
0.004096
441.5377638
23.01543055
0.001641222
36.09729445
60.81472314

53.5596759

It is clear by MSE that if α value increases the error is also increase.

6. A trend line for the attendance at a restaurant's
Sunday brunch is given by
Number = 264 + .72(t)
How many guests would you expect in week 20?
We have to put the value 20 in the place of‘t’ and we get,
Number=264+ (0.72*20) we get

Number= 278.4 nos. Or 278 nos.

7. The number of new contributors to a public radio
station's annual fund drive over the last ten years is
63, 58, 61, 72, 98, 103, 121, 147, 163, 198
Develop a trend equation for this information, and use
it to predict next year's number of new contributors.
Let y denote the number of new contributors to a public radio station’s annual fund drive and x
denote the year. Assume that x and y is linearly related. Let y = α + β x be the suggested linear
relationship.
By the method of least squares the estimates of α and β are given by,

n∑ xi yi − (∑ xi )(∑ yi )
ˆ
β=
n∑ xi2 − (∑ xi )2

y − βˆ ∑ x

αˆ =
i

And

i

n

x

Y

Xy

x2

y2

1
2
3
4
5
6
7
8
9
10
55

63
58
61
72
98
103
121
147
163
198
1084

63
116
183
288
490
618
847
1176
1467
1980
7228

1
4
9
16
25
36
49
64
81
100
385

3969
3364
3721
5184
9604
10609
14641
21609
26569
39204
138474

From the given data we have

n

=10, ∑ x =55, ∑ y =1084, ∑ x y =7228, ∑ x =385 and ∑ y
i

=138474
Thus

i

i

i

2
i

2
i

10*7228 − 55*1084
ˆ
β=
10*385 − (55) 2 = 15.3455 and

1084 − 15.3455*55
αˆ =
= 24
10
Thus the trend equation is

y = 24 + 15.3455 x
The next year’s number of new contributors can be obtained by substituting x = 11 in the regression equation y = 24 + 15.3455 x and is given by,

y = 24 + 15.3455*11
= 192.8
= 193

8. The average SAT verbal score for students from one
high school over the last ten exams is
508, 490, 502, 505, 493, 506, 492, 490, 503, 501
Do the scores support an increasing or a decreasing
trend?
SAT Verbal
Score
508
490
502
505
493
506
492
490
503
501

Exam
1
2
3
4
5
6
7
8
9
10

SAT Verbal Score

510

y = -0.3515x + 500.93
R² = 0.0231

SAT Verbal Score

505

500

495

490

SAT Verbal Score
485
0

2

4

6

8

Exams

It is a downward trend, as per the above graph shows.

10

12

9. Use the following to forecast a value for period 14, a
second quarter.
T = 16.32 - .18(t)
C2 = .91
S2 = .75
t=0.91*0.75
= 0.6825
Putting the value of t in above equation we get
T= 16.32- 0.18*0.6825
T= 16.32-0.12285
T= 16.19715

10.

The number of properties newly listed with a real
estate agency in each quarter over the last four
years is given. Calculate the seasonal index
values.
Quarter
1
2
3
4

Quarter

TOTAL

1
73
89
123
92

1

Year
2
3
81
76
87
85
115
108
93
87

4
77
92
131
101

Average

Index

2

Average

Index

3

Average

Index

4

Average

Index

1

73

94.25

0.7745

81

94

0.8617

76

89

0.8539

73

114.25

0.6389

2

89

94.25

0.9443

87

94

0.9255

85

89

0.9551

120

114.25

1.0503

3

123

94.25

1.3050

115

94

1.2234

108

89

1.2135

176

114.25

1.5405

4

92

94.25

0.9761

93

94

0.9894

87

89

0.9775

88

114.25

0.7702

285

376

356

457

11.

Quarterly billing for water usage is shown below.
Quarter
Winter
Spring
Summer
Fall

a.
b.
c.
d.

Year
2
3
66
68
103
104
160
162
72
78

1
64
103
152
73

4
73
120
176
88

Find the seasonal index for each quarter.
De-seasonalize the data.
Find the trend line.
Assume there is no cyclical component and
forecast the summer billing for year 5.

a.
Quarter

1

Winter
Spring
Summer
Fall
TOTAL

64
103
152
73
392

Average

Index

98 0.653061
98 1.05102
98 1.55102
98 0.744898

2

Average

66
103
160
72
401

Index

3

100.25 0.658354
68
100.25 1.027431 104
100.25 1.59601 162
100.25
0.0288
78
412

Average
103
103
103
103

Index

4

Average

0.660194
73
1.009709 120
1.572816 176
0.757282
88
457

114.25
0.63895
114.25 1.050328
114.25 1.540481
114.25 0.770241

b.
(1)

(2)

(3)

(4)

(5)

(6) '3/5

(7) 1*1

(8) 1*6

Period
(x)
1

Quarter

Average of the same quarters for each
year
67.75

Seasonal Factor

x*yb

0.000751734

Deseasonalized Billing
(yb)
85136.53137

Square of
Period

Winter

Actual Billing
(y)
64

2

Spring

103

107.75

1.037304452

99.29582367

3

Summer

152

162.5

1.564380265

97.16307692

9

291.48923

4

Fall

73

77.75

0.748495788

97.52893891

16

390.11576

1

85136.531

4

198.59165

5

Winter

66

0.000751734

87797.04797

25

438985.24

6

Spring

103

1.037304452

99.29582367

36

595.77494

7

Summer

160

1.564380265

102.2769231

49

715.93846

8

Fall

72

0.748495788

96.19292605

64

769.54341

9

Winter

68

0.000751734

90457.56458

81

814118.08

10

Spring

104

1.037304452

100.2598608

100

1002.5986
1139.1092

11

Summer

162

1.564380265

103.5553846

121

12

Fall

78

0.748495788

104.2090032

144

1250.508

13

Winter

73

0.000751734

97108.85609

169

1262415.1

14

Spring

120

1.037304452

115.6844548

196

1619.5824

15

Summer

176

1.564380265

112.5046154

225

1687.5692

16

Fall

88

0.748495788

117.5691318

256

1881.1061

136

1662

Index

c.
Avg Of X = 136/16= 8.5,
∑xyb – n*avg(x)avg(yb)
B=

2

2

= -1805.25

∑x – n*avg(x)

A= Avg(yb) – B*avg(x)

= 37953.73

Therefore Y=A+Bx
Y = 37953.73+(-1805.25)x

12.

A customer comment phone line is staffed from
8:00 a.m. to 4:30 p.m. five days a week. Records
are available that show the number of calls
received every day for the last five weeks.
Week
1

2

3

a.
b.
c.
d.

Day
M
T
W
TH
F
M
T
W
TH
F
M
T
W
TH
F

Number
28
12
16
15
23
29
10
14
14
26
32
15
15
18
27

Week
4

5

Day
M
T
W
TH
F
M
T
W
TH
F

Number
35
17
16
20
29
37
19
18
21
28

Use this information to calculate a seasonal index.
De-seasonalize the data.
Find the trend line.
Assume there is no cyclical component and forecast
the calls for week 6.

Slope
0.28

Intercept
17.67

Week

n

Day

Number

Trend

Seasonal Index

Deseasonal Data

1

1

M

28

17.9538

1.51

18.57

2

T

12

18.2376

0.68

17.56

3

W

16

18.5214

0.74

21.63

4

TH

15

18.8052

0.82

18.20

5

F

23

19.089

1.25

18.47

6

M

29

19.3728

1.51

19.24

7

T

10

19.6566

0.68

14.63

8

W

14

19.9404

0.74

18.93

9

TH

14

20.2242

0.82

16.99

2

3

4

5

6

10

F

26

20.508

1.25

20.88

11

M

32

20.7918

1.51

21.23

12

T

15

21.0756

0.68

21.95

13

W

15

21.3594

0.74

20.28

14

TH

18

21.6432

0.82

21.85

15

F

27

21.927

1.25

21.68

16

M

35

22.2108

1.51

23.22

17

T

17

22.4946

0.68

24.87

18

W

16

22.7784

0.74

21.63

19

TH

20

23.0622

0.82

24.27

20

F

29

23.346

1.25

23.29

21

M

37

23.6298

1.51

24.54

22

T

19

23.9136

0.68

27.80

23

W

18

24.1974

0.74

24.33

24

TH

21

24.4812

0.82

25.49

25

F

28

24.765

1.25

22.48

26

M

25.0488

1.51

27

T

25.3326

0.68

28

W

25.6164

0.74

29

TH

25.9002

0.82

30

F

26.184

1.25

14. A 24-hour coffee/donut shop makes donuts every
eight hours. The manager must forecast donut
demand so that the bakers have the fresh
ingredients they need. Listed below is the actual
number of glazed donuts (in dozens) sold in each
of the preceding 13 eight-hour shifts.
Date
June 3

Shift
Day
Evening
Night
Day
Evening
Night
Day
Evening
Night
Day
Evening
Night
Day

June 4

June 5

June 6

June 7

Demand(dozens)
59
47
35
64
43
39
62
46
42
64
50
40
69

Forecast the demand for glazed donuts for the three
shifts of June 8 and the three shifts of June 9.
Slope
0.4945

Intercept
47.308

Shift

Demand(dozens)

Trend

Date

n

3-Jun

1

Day

59

47.80

2

Evening

47

48.30

3

Night

35

48.79

4

Day

64

49.29

5

Evening

43

49.78

6

39
62

50.28

7

Night
Day

50.77

8

Evening

46

51.26

9

Night

42

51.76

Day

64

52.25

Evening

50

52.75

40
69

53.24

4-Jun

5-Jun

6-Jun 10
11

12 Night
7-Jun

13

Day

14 Evening
15

Night

53.74
54.23
54.73

8-Jun 16
17
9-Jun

Day

55.22

Evening

55.71

18 Night

56.21

19

Day

56.70

20 Evening

57.20
57.69

21

Night

15.In order to forecast the attendance at an annual
tennis tournament, a model has been developed which
uses attendance from the previous year and the
amount spent for advertising this year. From the
years shown in the table, forecast the attendance for
years 2-5 and calculate the forecast error.
Year
1
2
3
4
5

Attendance
8363
9426
9318
10206
11018

Expenditure
750
1250
3200
4500
5600

Forecast

Error

The multiple regression model is Attendance = 6738 +
.23(\$) + .25 (Attlag)
Attlag is last year’s actual attendance.
So, if we take the 1st year attendance and put in to the equation we get,
Attendance = 6738 + 0.23*1250 + 0.25*8363 like wise we get from excel sheet.
Year

Attendance

Expenditure

Forecast

Error

1

8363

750

2

9426

1250

9116.25

309.75

3

9318

3200

9830.5

-512.5

4

10206

4500

10102.5

103.5

5

11018

5600

10577.5

440.5