Individual Assignment (Mock Exam)

1. Over the past three months, the demand for a product has been 255, 219, and 231. Calculate
the three-month moving average forecast for month 4. If the actual demand in month 4 is
228, calculate the forecast for month 5.
Answer. 235, 226
2. Given the following data, calculate the three-month moving average forecasts for months 4,
5, 6, and 7.

Month Actual Demand Forecast

1 60
2 70
3 40
4 50
5 70
6 65
7
3. If the forecast for February was 122 and actual demand was 135, what would be the forecast
for March if the smoothing constant (α) is 0.15? Use exponential smoothing for your
calculation.
Answer. Forecast = 123.95 = 124
4. Using exponential smoothing, calculate the forecasts for months 2, 3, 4, 5, and 6. The
smoothing constant is 0.2, and the old forecast for month 1 is 245.
Actual Forecast
Month
Demand Demand
1 260
2 230
3 225
4 245
5 250
6
5. Given the following data, calculate forecasts for months 4, 5, 6, and 7 using a three-month
moving average and an exponential smoothing forecast with an alpha of 0.3. Assume a
forecast of 61 for month 3:

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6. The number of patients coming to the Healthy Start maternity clinic has been increasing
steadily over the past eight months. Given the following data, use a linear trend line to
forecast attendance for months 9 and 10.

7. If the average demand for the first quarter was 140 and the average demand for all quarters
was 175, what is the seasonal index for the first quarter? If the forecast for next year is 800,
calculate the forecast for first quarterly demand next year.
Answer. Seasonal index = 0.80
Forecast for the first quarter =160
8. A university wants to develop forecasts for next year’s quarterly enrollment. As shown in the
table, the university has collected quarterly enrollments for the past two years. It has also
forecast total annual enrollment for next year to be 90,000 students. What is the forecast for
each quarter (season) of next year?

Answer.
Quarter1 (Fall) = 27,428
Quarter 2 (Winter) = 24,728
Quarter 3 (Spring ) = 20,880
Quarter 4 (Summer) = 16,988
9. The average demand for January has been 90, and the average annual demand has been 1800.
Calculate the seasonal index for January. If the company forecasts annual demand next year
at 2000 units, what is the forecast for January next year?
10. An amusement park, experiences seasonal attendance. It has collected two years of quarterly
attendance data and made a forecast of annual attendance for the coming year. Compute the
seasonal indexes for the four quarters and generate quarterly forecasts for the coming year,
assuming annual attendance for the coming year to be 1525

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11. If the actual demand for April was 1440 units and the seasonal index was 2.5, what
would be the deseasonalized April demand?
Answer. Deseasonalized demand = 576 units
12. Given the following forecast and actual demand, calculate the mean absolute deviation
(MAD) .
Period Forecast Actual Demand Absolute Deviation
1 110 85
2 110 105
3 110 120
4 110 100
5 110 90
Total
Answer. MAD = 14
13. Two different forecasting models were used to forecast sales of a popular soda on a college
campus. Actual demand and the two sets of forecasts are shown. Use MAD to explain which
method provided a better forecast.

14. A Restaurant forecasts weekly sales of burgers. Based on historical observations over the
past five weeks, make a forecast for the next period using the following methods: simple
average, three-period moving average, and exponential smoothing with α= 0.3, given a
forecast of 328 burgers for the first week.

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If actual sales for week 6 turn out to be 368, compare the three forecasting methods using MAD.
Which method performed best?

15. The following historical data have been collected representing sales of a product. Compare
forecasts using a three-period moving average, exponential smoothing with α=0.2, and linear
regression. Using MAD and MSE, which forecasting model is best? Are your results the same
using the two error measures?

Week Demand
1 20
2 31
3 36
4 38
5 42
6 40
16. A company uses a tracking signal with limits of ± 4 to decide whether a forecast should be
reviewed. Compute the tracking signal given the following historical information and decide
when the forecast should be reviewed. The MAD for this item was computed as 2.

17. Hospitality Hotels forecasts monthly labor needs. Given the following monthly labor figures,

a) Make a forecast for June using a three-period moving average and a five period moving
average
b) What would be the forecast for June using the naïve method?
c) If the actual labor figure for June turns out to be 41, what would be the forecast for July using
each of these models?
d) Compare the accuracy of these models (the naïve, three-period moving average and a five
period moving average methods) using the mean absolute deviation (MAD).
e) Compare the accuracy of these models using the mean squared error (MSE).