Subject: Operations Management

File Name: OM_1753812_Bhupendra_DHA_2018-19

Q21:
Quaker Brand Foods uses oats in some of its cereal products. The price of oats is volatile, so Quaker
would like to forecast the average weekly price. The average prices per bushel for the past eight
weeks are as follows;
Week Average Price/Bushel ($)
1 1.16
2 1.21
3 1.22
4 1.25
5 1.23
6 1.19
7 1.20
8 1.17
(a) Using a weighted moving average with N = 3 and weights of 3/6, 2/6, and 1/6, compute the
forecasts that would have occurred during the past 5 weeks.
(b) Compute the forecasts that would have occurred using a simple exponential smoothening model
with α = 0.30 and an initial forecast for week 1 of $1.18.
(c) Compute and compare the mean absolute deviation and mean absolute percentage error for
each model during weeks 5-8.
(d) For the better of the two models, compute a forecast for week 9.