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#2

Sample Size (n) = 4


Number of Samples = 5
Hour
1st Observation
2nd Observation
3rd Observation
4th Observation

Sample Size

11:00am
35
34
25
24

Noon 1:00pm 2:00pm 3:00pm


24
23
17
25
20
18
14
24
19
21
21
19
17
17
22
17

X-Bar

29.5

20

19.75

18.5

21.25

CL X-Bar

21.8

21.8

21.8

21.8

21.8

UCLx
LCLx

27.632
15.968

27.632 27.632
15.97 15.968

27.632
15.968

27.632
15.968

R-Chart
CL R-Chart
UCLr
LCLr

11
8
18.256
0

7
6
8
8
18.256 18.256
0
0

8
8
18.256
0

8
8
18.256
0

A2

1.880

1.023

0.729

0.577

10

0.308

0.223

15

0.223

0.348

20

0.180

0.414

25

0.153

0.459

UCLx x A2 R

A2 =

LCLx x A2 R

D4 =

D3 =

UCLR D4 R
LCLR D3 R

X-Bar

30

20

X-Bar

25

CL X-Bar

15
10

UCLx

20

LCLx
15

5
0

D3

A2

D3

D4

1.880

3.267

1.023

2.575

0.729

2.282

0.577

2.115

0.308

0.223

1.777

0.223

0.348

1.652

0.180

0.414

1.586

0.153

0.459

1.541

0.729
0.000
2.282

R-Chart

R-Chart
CL R-Chart
UCLr
LCLr

3 5. Okland has developed the tasks, durations, and predecessor relationships in the following table for part of
Draw the precedence network for the project and answer the questions that follow. The Beta distribution is assum
Expected Time = (To + 4Tm + Tp)/(6)
Variance = [(Tp - To)/6]2
Immediate
Predecessor(s)
Task

Time Estimates (In Weeks)


Optimistic

A
B
C
D
E
F
G
H

None
A
A
B
B
C
D
E, F

5
5
3
1
3
2
3
2

Most
Likely
6
6
4
3
4
4
4
3

Pessimistic
19
7
5
5
17
6
5
4

Expected
Time
8
6
4
3
6
4
4
3

Variance
5.44
0.11
0.11
0.44
5.44
0.44
0.11
0.11

3. What are the ES (earliest start) and the LS (latest start) for each task based on the expected task times?
14
16
8
8
ES
LS

START

0
0

B, 6

A, 8

8
12

C, 4

D, 3

14
14

E, 6

12
16

F, 4

4. What is the probability of completion of the project before week 26 using the critical path based on the expect
Critical Path = Longest Path = A-B-E-H
Variance =
11.11
Sqrt =
3.33

Z=
Probability =

0.9
81.59%

<-- = (26-23)/(3.33)
<-- = Normsdist(Z)

5. Okland developed a project crashing data table for the building project as shown below. Use expected task tim
answer questions and assume that there is no uncertainty for the times listed. Crash time is the absolute minimum
Task

Normal Time

Crash Time

A
B
C
D
E
F
G
H

8
6
4
3
6
4
4
3

7
2
1
2
5
1
1
1

Cost per
week to
crash
$11,000
$6,000
$7,000
$5,000
$4,000
$8,000
$10,000
$9,000

How much will it cost to crash the project by 5 weeks?


Critical Path = A-B-E-H

Week
1
2
3
4
5

Crash Activity
Original
E
B
B
B
H
Total

Cost
$0
$4,000
$6,000
$6,000
$6,000
$9,000
$31,000

A
8
8
8
8
8
7

B
6
6
5
4
3
3

E
6
5
5
5
5
5

H
3
3
3
3
3
3

he following table for part of the new business building.


The Beta distribution is assumed for all activity times.

expected task times?

17
19

G, 4
23

20
20

H, 3

cal path based on the expected task times?

End

elow. Use expected task times as normal times to


time is the absolute minimum time to do that task.

Length
23
22
21
20
19
18

ES

EF

LS

LF

14 23
17 26

C,9

4 14

14 20

4 14

20 26

23 31

31 36

26 34

34 39

E,8

G,5
39 45

START

A,4

B,10

D,6

39 45

14 30

30 39

14 30

30 39

F,16

H,9

I, 6

END

39 45
39 45

I, 6

END

Forecast demand for week 13 using two different methods:


a) Two week simple moving average
Week
1
2
3
4
5
6
7
8
9
10
11
12
13

Demand Forecast Error


114
118
145
116
29
141
131.5
9.5
124
143
-19
121
132.5
-11.5
114
122.5
-8.5
104
117.5
-13.5
134
109
25
144
119
25
137
139
-2
138
140.5
-2.5
137.5

Mean

3.15

Absolute Error

Squared Error

Absolute Error

29
9.5
19
11.5
8.5
13.5
25
25
2
2.5

841
90.25
361
132.25
72.25
182.25
625
625
4
6.25

20.00%
6.74%
15.32%
9.50%
7.46%
12.98%
18.66%
17.36%
1.46%
1.81%

14.55

293.93

11.13%

b) Exponential smoothing with a = 0.1 as the smoothing constant


Ft+1 = Ft + a(Dt - Ft )
= 0.1
Week
1
2
3
4
5
6
7
8
9
10
11
12
13
Mean

Demand Forecast Error Absolute Error


114
114
118
114
4
4
145
114.40 30.60
30.60
141
117.46 23.54
23.54
124
119.81 4.19
4.19
121
120.23 0.77
0.77
114
120.31 -6.31
6.31
104
119.68 -15.68
15.68
134
118.11 15.89
15.89
144
119.70 24.30
24.30
137
122.13 14.87
14.87
138
123.62 14.38
14.38
125.05
10.05

14.05

Squared Error

Absolute Error

16
936.36
554.13
17.52
0.59
39.81
245.81
252.47
590.51
221.13
206.88

3.39%
21.10%
16.70%
3.38%
0.63%
5.53%
15.08%
11.86%
16.88%
10.85%
10.42%

280.11

10.53%

c) Discuss which forecast is better with reference to MAD & MSE


For Mean Absolute Deviation, our smoothed forecast is better since it has a smaller forecast error
of 14.05 vs. the two-week moving average error of 14.55

For Mean Squared Error, our smoothed forecast is better since it has a smaller forecast error
of 280.11 vs. a two-week moving average error of 293.93
155
145
135
125

Demand

115

Forecast - Two Week MA

105

Forecast - SES

95
85
75
0

10

11

12

13

aller forecast error

orecast error

Demand
Forecast - Two Week MA
Forecast - SES

A firm has collected the following quarterly sales data on a key product:
a) Create a seasonally adjusted forecast for year 4 (to 2 decimal places) using the method shown in class
Year/Quarter
2012/1
2012/2
2012/3
2012/4
2013/1
2013/2
2013/3
2013/4
2014/1
2014/2
2014/3
2014/4

2015/1
2015/2
2015/3
2015/4

Period
1
2
3
4
5
6
7
8
9
10
11
12

13
14
15
16

Sales
40.00
39.00
43.00
41.00
41.00
43.00
46.00
47.00
49.00
50.00
51.00
55.00

Year 4 Forecasts
54.12
55.46
56.80
58.14

Regression Forecasts
38.05
39.39
40.73
42.07
43.41
44.75
46.09
47.43
48.76
50.10
51.44
52.78

1.00
0.98
1.02
1.00

Actual/Projected
1.05
0.99
1.06
0.97
0.94
0.96
1.00
0.99
1.00
1.00
0.99
1.04
Seasonally Adjusted
54.13
54.52
57.66
58.29

b) Is the seasonal adjustment worthwhile in this case? Why or why not?


No, since the seasonal index is very close to 1, there is no need to adjust seasonally
as this company does not have seasonality affecting its sales

ethod shown in class


Intercept:
Slope:
F1t = a+bt

36.7121
1.3392

Quarter
1
2
3
4

Seasonal Index
1.00
0.98
1.02
1.00