NAME: Opelario, Markel Angelo R.

DATE:_________________

SECTION/TIME/DAY:_________________________ROOM:_____________RATING________

Exercise 14

1. Five security officers are requested by the University of the East to be assigned in five
buildings. The daily cost of each officer in each building is indicated below. Determine the best
allocation of officers to various buildings so as to minimize the cost.

BUILDINGS

ACA Engineering BA Fine Arts TYK

1. 300 250 330 270 360
2. 400 350 250 280 290
3. 360 400 370 300 350
4. 280 250 270 280 310
5. 350 380 370 300 320

ACA Engineering BA Fine Arts TYK

1 50 0 80 20 110
2 150 100 0 30 40
3 60 100 70 0 50
4 30 0 20 30 60
5 50 80 70 0 20

ACA Engineering BA Fine Arts TYK

1 20 0 80 20 90
2 120 100 0 30 20
3 30 100 70 0 30
4 0 0 20 30 40
5 20 80 70 0 0

Security officer Building cost

1 Engineering 280
2 BA 250
3 Fine Arts 250
4 ACA 300
5 TYK 320
 total 1400

Final decision:

Security officer 1 – engineering

Security officer 2 – BA

Security officer 3 – Fine Arts

Security officer 4 – ACA

Security officer 5 – TYK

2. Doggy agency has three police dogs to be assigned to three different department stored. The
cost of each dog on each department s given below

Dogs Isetan Show Mart Robinsons

1 200 350 270

2 300 250 150

3 400 350 270

Determine the optimum cost of each dog per department.

Dogs Isetan Show Mart Robinsons

1 0 150 70
2 150 100 0
3 130 80 0

Dogs Isetan Show Mart Robinsons

1 0 70 70
2 150 20 0
3 130 0 0

Dogs Mall Cost

1 Isetan 200
2 Robinsons 350
 3 Show Mart 150
Total: 700

Final decision:

Dog 1 – Isetan

Dog 2 – Robinsons

Dog 3 – Show Mart

3. Find the least cost of assignment

Machines A B C D
J 1 300 500 700 900
O 2 300 700 500 700
B 3 900 600 300 300
S 4 800 900 500 500

Jobs A B C D
1 0 200 400 500
2 0 400 200 400
3 600 300 0 0
4 300 400 0 0

Jobs A B C D
1 0 0 400 500
2 0 200 200 400
3 600 100 0 0
4 300 200 0 0

Jobs Machine Cost

1 B 500
2 A 300
3 C 300
4 D 500
Total: 1600
 Final decision:

Job 1 – machine B

Job 2 – machine A

Job 3 – machine C

Job 4 – machine D

4. Jacqueline and Vilma are business partners. They decided to hire four accountants to be
assigned to audit their business. The next table shows the cost per accountants.
Determine the best allocation for each accountant.

Accountants 1 2 3 4

B A 14,000 12,000 13,000 15,000

U B 16,000 10,000 12,000 14,000

S C 13,000 16,000 15,000 11,000

S D 12,000 13,000 14,000 11,000

Business 1 2 3 4
A 2000 0 1000 3000
B 6000 0 2000 4000
C 2000 5000 4000 0
D 1000 2000 3000 0

Business 1 2 3 4
A 1000 0 0 3000
B 5000 0 1000 4000
C 1000 5000 3000 0
D 0 2000 2000 0
 Business Accountant Cost
A 3 13000
B 2 10000
C 4 11000
D 1 12000
total: 46000

Final decision:

Business A – accountant 3

Business B – accountant 2

Business C – accountant 4

Business D – accountant 1

5. Former PBL players are about to join the most prestigious league in the country, the
Philippines Basketball Association (PBA). Four teams are willing to acquire the services
of the following players: James Yap, Rich Alvarez, Paul Artadi, and Ronald Tubid. The
table below shows the monthly salaries they wanted excluding the bonuses and other
benefits. Determine the optimal answer for each team to minimize their cost.

Yap Alvarez Artadi Tubid

Red Bull ₱150,000 ₱155,000 ₱145,000 ₱165,000

Purefoods ₱165,000 ₱160,000 ₱155,000 ₱175,000

FedEx ₱150,000 ₱155,000 ₱165,000 ₱160,000

Talk N’ Text ₱160,000 ₱155,000 ₱165,000 ₱150,000

Team Yap Alvarez Artadi Tubid

Red Bull 5000 10000 0 20000
Purefoods 10000 5000 0 20000
Fed Ex 0 5000 15000 10000
 Talk N’ Text 10000 5000 15000 0

Team Yap Alvarez Artadi Tubid

Red Bull 5000 5000 0 20000
Purefoods 10000 0 0 20000
Fed Ex 0 0 15000 10000
Talk N’ Text 10000 0 15000 0

Team Player Cost

Red Bull Artadi 145000
Purefoods Alvarez 160000
Fed Ex Yap 150000
Talk N’ Text Tubid 150000
Total: 605,000

Final decision:

Red bull – Artadi

Purefoods – Alvarez

Fed ex – Yap

Talk N’ Text – Tubid

6. Determine the optimal assignment of the management teams to the four projects

PROJECTS

W X Y Z
1. 3,800 2,800 2,400 3,600
2. 2,000 2,400 3,000 2,000
3. 3,200 1,800 2,200 2,800
4. 4,000 3,200 2,600 3,400

team W X Y Z
 1 1400 400 0 1200
2 0 400 1000 0
3 1400 0 400 1000
4 1400 600 0 800

Team Project Cost

1 Y 2400
2 W 2000
3 X 1800
4 Z 3400
Total: 9,600

Final decision:

Team 1 – project Y

Team 2 – project W

Team 3 – project X

Team 4 – project Z

7. The Fast Food lane decided to acquire the services of four part-time students to work as
service crew. They were given a speed test. The table below indicates their performances per
lane. Determine the best allocation for each crew.

Lane 1 Lane 2 Lane 3 Lane 4

Crew 1 15 18 20 16

Crew 2 18 17 14 20
Crew 3 21 20 13 15

Crew 4 17 15 18 19

crew Lane 1 Lane 2 Lane 3 Lane 4

1 0 3 5 4
2 4 3 0 6
3 8 7 0 2
4 2 0 3 4

crew Lane 1 Lane 2 Lane 3 Lane 4

 1 0 3 5 2
2 4 3 0 4
3 8 7 0 0
4 2 0 3 2

Crew Lane Performance

1 Lane 1 15
2 Lane 3 14
3 Lane 4 15
4 Lane 2 15
Total: 59

Final decision

Crew 1 – lane 1

Crew 2 – lane 3

Crew 3 – lane 4

Crew 4 – lane 2

8. Five workers of Denzel Engineering Works are to be assigned, one each to five machines.
Find the cost of allocation of the variable to the five workers.

WORKERS

Machines A B C D E
1 74 52 66 64 90
2 50 44 78 68 48
3 62 70 52 56 72
4 84 36 56 80 46
5 58 38 76 54 84

Machines A B C D E
1 22 0 14 12 38
 2 6 0 34 24 4
3 10 18 0 4 20
4 48 0 20 44 10
5 20 0 38 16 46

Machines A B C D E
1 16 0 14 8 32
2 0 0 34 20 0
3 4 18 0 0 16
4 42 0 20 40 6
5 14 0 38 12 42

Machines Worker Cost

1 D 64
2 A 50
3 C 52
4 E 46
5 B 38
Total: 250

Final decision:

Machine 1 – worker D

Machine 2 – worker A

Machine 3 – worker C

Machine 4 – worker E

Machine 5 – worker B

9. The V. Mapa High School students are about to join the Annual Quiz Bee to be held at the
PICC. The quiz bee consists of four subjects such as Math, Science, English, and Physics. The
table below shows their errors per subject in the qualifying round. Determine who among the
students will represent in the quiz bee.

Student 1 Student 2 Student 3 Student 4

Math 5 3 5 2
Science 1 6 3 4
English 4 2 3 1
Physics 2 3 4 1

Subject Student 1 Student 2 Student 3 Student 4

Math 3 1 3 0
Science 0 5 2 3
English 3 1 2 0
Physics 1 2 3 0

Subject Student 1 Student 2 Student 3 Student 4

Math 3 0 1 0
Science 0 4 0 3
English 3 0 0 0
Physics 1 1 1 0

Subject Student errors

Math 2 3
Science 1 1
English 3 3
Physics 4 1
Total: 8

Final decision:

Math – student 2

Science – student 1

English – student 3

Physics – student 4

10. Miling and Luming Contractors need three carpenters to be assigned to three projects.
Determine the best allocation of each carpenter.

Carpenters A B C
 1 80 90 54
2 54 108 30
3 46 104 48

Carpenters A B C
1 26 36 0
2 24 78 0
3 0 58 2

Carpenters A B C
1 26 0 0
2 24 42 0
3 0 22 2

Carpenters Projects Cost

1 B 90
2 C 30
3 A 46
Total: 166

Final decision:

Carpenter 1 – project B

Carpenter 2 – project C

Carpenter 3 – project A

11. Three regular researchers of Mic-Mic Marketing Research are required to submit their
Estimated Project Completion (EPC) times (days) to three clients. The table below shows their
EPC. Determine the best allocation for three researchers.

Employees Clients
 1 2 3

Denzel 20 30 18

Rino 18 36 10

Alvin 12 28 6

Employees Client1 Client 2 Client 3

Denzel 2 12 0
Rino 8 26 0
Alvin 6 22 0

Employees Client 1 Client 2 Client 3

Denzel 0 0 0
Rino 2 14 0
Alvin 4 10 0

Employees Clients EPC

Denzel 2 20
Rino 1 18
Alvin 3 6
Total: 44

Final decision:

Denzel – client 2

Rino – client 1

Alvin - client 3
Transportation and Assignment Model

CASE STUDY

NHOLRAM-BONG CORPORATION

The Nholram-Bong Corporation is a manufacturer and distributor of CCTV cameras. Its

CCTV camera is distributed throughout the Philippines and has a high demand in the market for
the last seven (7) years. The Corporation operates three (3) plants that manufacture the CCTV
cameras and are distributed to five (5) warehouses.

Last year, the Nholram-Bong Corporation experienced a big drop in the demand of the CCTV
cameras due to the high inflation. The sales supervisor of the Nholram-Bong Corporation
predicted that the demand for CCTV cameras will remain low for the next five (5) years. The
Corporation is considering to close one of its plants since at present it has an excess capacity of
68,000 units per week. The forecasted weekly demands for next year are as follows

Warehouse 1 18,000 units

Warehouse 2 26,000 units

Warehouse 3 22,000 units

Warehouse 4 30,000 units

Warehouse 5 16,000 units

Table 4.1 shows the production costs for each plant, the variable costs both during regular time
and overtime, and the fixed costs during the operation and non-operation

Table 4.1
 NHOLRAM-BONG CORPORATION

Variable Costs and the Fixed Production Costs per Week

Fixed Cost per week

Plant Variable Cost Operating Non-operating
Plant 1 Regular time ₱5,600 / unit ₱28,000 ₱12,000
Plant 1 Overtime 7,040 / unit
Plant 2 Regular time 5,560 / unit 24,000 10,000
Plant 2 Overtime 6,960 / unit
Plant 3 Regular time 5,440 / unit 30,000 15,000
Plant 3 Overtime 6840 / unit

Table 4.2 shows the distribution costs from each plant to each warehouse.

Table 4.2

NHOLRAM-BONG CORPORATION

Distribution Cost per Unit

Distribution Center

From Plant W1 W2 W3 W4 W5

1 ₱2,000 1,760 1,960 1,840 2,240

2 ₱1,600 2,080 2,000 2,240 2,280

3 ₱2,240 2,120 2,040 2,160 1,400

The Plant Capacities in Units per Week

Plant 1 Regular Time 54,000 units
Plant 1 Overtime 14000 units
Plant 2 Regular Time 40,000 units
Plant 2 Overtime 10,000 units
Plant 3 Regular Time 50,000 units
Plant 3 Overtime 12,000 units

If Nholram-Bong down any of its plants, its weekly costs will change as the fixed costs
decrease due to non-operation.
NAME: __________________________________________DATE:_________________

SECTION/TIME/DAY:_________________________ROOM:_____________RATING________

Exercise 15

1. Use quantitative methods for the data shown below:

Period 1 2 3 4 5 6 7
Observatio 24 34 36 37 41 44 45
n

a. Compute for:

i. Naïve Method

Naïve forecasting
Period Observation Forecast
1 24
2 34 24
3 36 34
4 37 36
5 41 37
6 44 41
7 45 44

ii. Three-period Moving Average

iii. Three-period Weighted Moving Average

Three-Period Weighted Moving Average Forecast

Period Observation Three-Month Weighted Moving
Average
1 24
2 34
3 36
4 37 ⦋ ( 36 ×3 )+ (34 ×2 ) +24 ⦌
=33
6
5 41 ⦋ ( 37 ×3 )+ (36 × 2 ) +34 ⦌
=36
6
 6 44 ⦋ ( 41 ×3 )+ ( 37× 2 ) +36 ⦌
=39
6
7 45 ⦋ ( 44 ×3 ) + ( 41× 2 )+ 37 ⦌
=42
6

iv. Four-period Moving Average

Four-Period Average Forecast

Period Observation Forecast
1 24
2 34
3 36
4 37
5 41 24 +34+ 36+37
=33
4
6 44 34 +36+37+41
=37
4
7 45 36 +37+ 41+ 44
=40
4

v. Four-period Weighted Moving Average

b. Plot the original time series and comment on the appropriateness of a linear trend.
 Linear Trend
50
45
40
35
30
25
20
15
10
5
0
1 2 3 4 5 6 7
Observation Column1

2. Suppose that the University of the West had the following data of its growth of enrollment
from 2016-2014.

Year Enrollment
2006 3000
2007 3200
2008 3600
2009 3650
2010 4000
2011 4200
2012 4300
2013 4410
2014 4520

a. Forecast the 2015 enrollment using three-year weighted moving average forecast.

Three-Month Weighted Moving Average Forecast

Year Enrollment Three-Month Weighted Moving Average
2012 4300
2013 4410
2014 4520
2015 ⦋ ( 4520 × 3 ) + ( 4410 ×2 ) + 4300 ⦌
=4447
6

b. Using smooth ɑ = 0.30, forecast the 2015 enrollment.

 Year Enrollment Forecast Error
2006 3000 -
2007 3200 3000 200
2008 3600 3060 540
2009 3650 3222 378
2010 4000 3350 650
2011 4200 3545 655
2012 4300 3742 558
2013 4410 3909 501

2014 4520 3915 605

2015 4197

F2008 = 3000 + 0.30(3200 - 3000)

F2008 = 3060

F2009 = 3060 + 0.30(3600 – 3060); F2012 = 3545 + 0.30(4200 - 3545)

F2009 = 3222 F2012 = 3742

F2010 = 3222 + 0.30(3650 – 3222) F2013 = 3742 + 0.30(4300 – 3742)

F2010 = 3350 F2013 = 3909

F2011 = 3350 + 0.30(4000 – 3350) F2014 = 3909 + 0.30(4410 – 3909)

F2011 = 3545 F2014 = 4059

F2015 = 4059 + 0.30(4520 – 4059)

F2015 = 4197

c. Using MAD, solve for the forecasting error at ɑ = 0.10

Year Enrollment Error at ɑ = 0.10

2006 3000 -
2007 3200 200
2008 3600 180
2009 3650 572
2010 4000 865
2011 4200 978
2012 4300 980
2013 4410 992
2014 4520 1003
2015
 5770
MAD = (721.25)
8

d. Use four-year weighted moving average from 2006-2015

Four-Year Weighted Moving Average Forecast

Year Enrollment Three-Month Weighted Moving Average
2006 3000
2007 3200
2008 3600
2009 3650
2010 4000 ⦋ ( 3650 ×3 ) + ( 3600 ×2 )+3200 ⦌
=3558
6
2011 4200 ⦋ ( 4000 × 3 ) + ( 3650× 2 ) +3600 ⦌
=3817
6
2012 4300 ⦋ ( 4200 × 3 ) + ( 4000 ×2 ) +3650 ⦌
=4042
6
2013 4410 ⦋ ( 4300 × 3 ) + ( 4200 ×2 ) + 4000 ⦌
=4217
6
2014 4520 ⦋ ( 4410 × 3 ) + ( 4300 ×2 ) + 4200 ⦌
=4338
6
2015 ⦋ ( 4520 × 3 ) + ( 4410 ×2 ) + 4300 ⦌
=4447
6

3. For the Philippines Basketball Association (PBA) 2013-2014 season, San Mig James Yap
was the scoring leader with an average of 33 points per game. The following data shows the
average of points per game for the scoring leader from the 2008-2009 season to the 2013-2014
season.

Season Average
2008-2009 25
2009-2010 35
2010-2011 29
2011-2012 34
2012-2013 35
2013-2014 33

a. Use exponential smoothing to forecast this time series. Consider smoothing constant of
ɑ = 0.20 and ɑ = 0.30. What value of the smoothing constant provides the best forecast.
Answer: 0.20

Season Average Forecast Forecast Error

 at ɑ = 0.20
2008-2009 25 - -
2009-2010 35 25 10
2010-2011 29 27 2
2011-2012 34 27.4 6.6
2012-2013 35 28.72 6.28
2013-2014 33 29.98 3.02

Season Average Forecast Forecast Error

at ɑ = 0.30
2008-2009 25 - -
2009-2010 35 25 10
2010-2011 29 28 1
2011-2012 34 28.3 5.7
2012-2013 35 30.01 4.99
2013-2014 33 31.52 1.48

b. What is the forecast of the leading scoring average for the 2014-2015 season?

2014- 2015 = 33

c. Graph the forecast at ɑ = 0.30.

Season Forecast
12

10

0
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
a = 0.20 Column1
4. Fill out the vacant portion in the table. Some data are already given as follows:

Sales Four-Week Four-Week Weighted Moving

Week (₱1,000) Moving Average Average
1 23
2 36
3 45
4 46
23+ 36+45+ 46 ⦋ ( 46 × 3 ) + ( 45 × 2 )+ 36 ⦌
=38 =44
5 55 4 6
36 +45+ 46+55 ⦋ ( 55 ×3 ) + ( 46 ×2 ) + 45 ⦌
=46 =50
6 64 4 6
64 +55+ 46+45 ⦋ ( 64 × 3 ) + ( 55 ×2 ) +46 ⦌
=53 =58
7 55 4 6
55+ 64+55+ 46 ⦋ ( 55 ×3 ) + ( 64 ×2 ) +55 ⦌
=55 =58
8 58 4 6
58+ 55+ 64+55 ⦋ ( 58 ×3 ) + ( 55 ×2 )+ 64 ⦌
=58 =58
9 66 4 6
66 +58+55+64 ⦋ ( 66 ×3 )+ ( 58× 2 ) +55 ⦌
=61 =62
10 65 4 6
65+ 66+58+55 ⦋ ( 65 ×3 )+ (66 × 2 ) +58 ⦌
=61 =¿ 64
11 48 4 6
48+65+66+ 58 ⦋ ( 48 × 3 ) + ( 65 ×2 ) +66 ⦌
=59 =57
12 67 4 6
67 +48+ 65+ 66 ⦋ ( 67 ×3 )+ ( 48 ×2 ) +65 ⦌
=62 =60
13 58 4 6
58+ 67+48+ 65 ⦋ ( 58 ×3 ) + ( 67 × 2 ) +48 ⦌
=60 =59
14 68 4 6

5. Use exponential smoothing with ɑ between 0.10 and 0.30 to get the forecast one period
ahead for the following time series.

Use initial value for F1 = 200 and identify which value of ɑ is the best.

Period Demand Forecast a = 0.10 a = 0.30

1 250 200
2 265 - 200 + 0.1 (250 – 200) = 205 200 + 0.30 (250 – 200) = 215
3 300 - 205 + 0.10 (265 – 205) = 211 215 + 0.30 (265 – 205) = 233
4 350 - 211 + 0.10 (300 – 211) = 220 233 + 0.30 (300 – 211) = 260
5 250 - 220 + 0.10 (350 – 220) = 233 260 + 0.30 (350 – 260) = 287
6 350 - 233 + 0.10 (250 – 233) = 258 287 + 0.30 (250 – 287) = 276
7 265 - 258 + 0.10 (350 – 258) = 267 276 + 0.30 (350 – 276) = 298
 8 390 - 267 + 0.10 (265 – 267) = 267 298 + 0.30 (265 – 298) = 288
9 350 - 267 + 0.10 (390 – 267) = 279 288 + 0.30 (390 – 288) = 319
10 400 - 279 + 0.10 (350 – 279) = 286 319 + 0.30 (350 – 319) = 328
11 470 - 286 + 0.10 (400 – 286) = 297 328 + 0.30 (400 – 328) = 350

6. ANVICOROSE building contracts for a 12-month period are (in million pesos) shown below:

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

35M 27M 37M 41M 45M 38M 44M 42M 39M 43M 39M 40M
a. Compare a four-month moving average forecast with an exponential smoothing forecast
using ɑ = 0.30. Which of the two provides better forecasts?

Forecast Four-Month Weighted Moving a = 0.30

Month Demand Average Forecast
1 35M - -
2 27M 35M -
3 37M 32.6M - 35M + 0.30 (27M – 35M) = 32.6M
4 41M 34M - 32.6M+0.30(37M – 32.6M) = 34M
36M ⦋ ( 37 M × 3 ) + ( 27 M × 2 ) +35 M ⦌ 34M + 0.30 (41M – 34M) = 36M
=33 M
5 45M 6
38.7M ⦋ ( 41 M × 3 ) + ( 37 M × 2 ) +27 M ⦌ 36M + 0.30 (45M – 36M) = 38.7M
=37 M
6 38M 6
38.49M ⦋ ( 45 M ×3 ) + ( 41 M ×2 ) +37 M ⦌ 38.7M + 0.30 (38M – 38.7M) =
=42 M 38.49M
7 44M 6
40.14M ⦋ ( 38 M × 3 ) + ( 45 M × 2 ) +41 M ⦌ 38.49M + 0.30 (44M – 38.49M) =
=41 M 40.14M
8 42M 6
40.7M ⦋ ( 44 M ×3 )+ ( 38 M ×2 ) + 45 M ⦌ 40.14M + 0.30 (42M – 40.14M) =
=42 M 40.7M
9 39M 6
40.19M ⦋ ( 42 M × 3 ) + ( 44 M ×2 )+38 M ⦌ 40.7M + 0.30 (39M – 40.7M) =
=42 M 40.19M
10 43M 6
41.03M ⦋ ( 39 M × 3 ) + ( 42 M × 2 )+ 44 M ⦌ 40.19M + 0.30 (43M – 40.19M) =
=41 M 41.03M
11 39M 6
40.42M ⦋ ( 43 M ×3 ) + ( 39 M × 2 ) +42 M ⦌ 41.03M + 0.30 (39M – 41.03M) =
=42 M 40.42M
12 40M 6

b. What is the forecast for the next month?

Forecast Next Month = 40M

c. Plot the original data and the four-month moving average on the same graph.
 50

45

40

35

30

25

20

15

10

0
1 2 3 4 5 6 7 8 9 10 11 12
Demand Column1

d. Plot the original data and the smoothing forecast on the same graph.

50

45

40

35

30

25

20

15

10

0
1 2 3 4 5 6 7 8 9 10 11 12
Demand Column1
 e. Compute the MAD and MSE.

Forecast Forecast Squared Forecast

Month Demand Error Error
1 35M - - -
2 27M 35M -8 64
3 37M 32.6M 4.4 19.36
4 41M 34M 7 49
5 45M 36M 9 81
6 38M 38.7M -0.7 0.49
7 44M 38.49M 1.51 2.28
8 42M 40.14M 1.86 3.46
9 39M 40.7M -1.7 2.89
10 43M 40.19M 2.81 7.9
11 39M 41.03M -1.3 1.69
12 40M 40.42M -0.42 0.18
417.27 232.25
MAD = = MSE = =
11 11
37.93 21.11

7. The ALCOR Department Store has recorded the following numbers of customers’ complaints
each month.

Month Complaints
January 60
February 48
March 55
April 50
May 55

a. Compute a three-month weighted moving average.

b. Prepare forecast for June, July and August.
 Month Complaints Three-Month Weighted Moving
Average
January 60
February 48
March 55
April 50 ⦋ ( 55 ×3 ) + ( 48 ×2 ) +60 ⦌
=54
6
May 55 ⦋ ( 50 ×3 ) + ( 55 ×2 )+ 48 ⦌
=51
6
June ⦋ ( 55 ×3 ) + ( 50 ×2 )+55 ⦌
=53
6
July ⦋ ( 53 ×3 ) + ( 55 ×2 )+50 ⦌
=53
6
August ⦋ ( 53 ×3 ) + ( 53 ×2 )+51 ⦌
=53
6

8. Given: Gasoline Sales (time series) of PETRON (weekly)

Week Sales (Gallons)

1 13,000
2 18,000
3 19,000
4 16,000
5 17,000
6 15,000
7 14,000
8 19,000
9 20,000
10 16,500
11 17,500
12 20,000

a. Compute the three-week and four-week moving average for the time series.
b. Compute the MAD for three-week and four-week moving average forecasts.

Sales Three-Week Weighted Moving Four-Week Weighted Moving Average

Week (Gallons) Average Forecast Forecast
 1 13,000
2 18,000
3 19,000
⦋ ( 19 k ×3 ) + ( 18 k × 2 )+13 k ⦌
=18 k
4 16,000 6
⦋ ( 16 k ×3 )+ (19 k × 2 )+ 18 k ⦌ ⦋ ( 13 k ×3 ) + ( 19 k × 2 )+18 k ⦌
=17 k =16 k
5 17,000 6 6
⦋ ( 17 k ×3 )+ (16 k × 2 ) +19 k ⦌ ⦋ ( 19 k ×3 ) + ( 18 k × 2 )+13 k ⦌
=17 k =18 k
6 15,000 6 6
⦋ ( 15 k ×3 ) + ( 17 k × 2 ) +16 k ⦌ ⦋ ( 16 k ×3 )+ (19 k × 2 )+ 18 k ⦌
=16 k =17 k
7 14,000 6 6
⦋ ( 14 k × 3 ) + ( 15 k ×2 ) +17 k ⦌ ⦋ ( 17 k ×3 )+ (16 k × 2 ) +19 k ⦌
=15 k =17 k
8 19,000 6 6
⦋ ( 19 k ×3 ) + ( 14 k × 2 ) +15 k ⦌ ⦋ ( 15 k ×3 ) + ( 17 k × 2 ) +16 k ⦌
=17 k =16 k
9 20,000 6 6
⦋ ( 20 k ×3 )+ (19 k × 2 )+ 14 k ⦌ ⦋ ( 14 k × 3 ) + ( 15 k ×2 ) +17 k ⦌
=19 k =15 k
10 16,500 6 6
⦋ ( 16.5 k ×3 ) + ( 20 k × 2 )+ 19 k ⦌ ⦋ ( 19 k ×3 ) + ( 14 k × 2 ) +15 k ⦌
=18 k =17 k
11 17,500 6 6
⦋ ( 17.5 k ×3 ) + ( 16.5 k ×2 )+20 k ⦌ ⦋ ( 20 k ×3 )+ (19 k × 2 )+ 14 k ⦌
=18 k =19 k
12 20,000 6 6
155 135
MAD = =17.22 k MAD = =16.88 k
9 8
c. What appears to be the best number of weeks of past data to be used in the moving
average computation? 12th week
d. Compute the percentage error and MAPE.

Absolute Arithmeti
Forecas Forecas Absolut Percentag Accurac c
Week Actual t t Error e Error e Error y Accuracy
a b c d e f g h

Formula b-c abs(d) e/b 1-f b/c

1 13,000 - - - - - -
2 18,000 13,000 5,000 5,000 28% 72% 138%
3 19,000 18,000 1,000 1,000 5% 95% 106%
4 16,000 19,000 -3,000 3,000 19% 81% 84%
5 17,000 16,000 1,000 1,000 6% 94% 106%
6 15,000 17,000 -2,000 2,000 13% 87% 88%
7 14,000 15,000 -1,000 1,000 7% 93% 93%
8 19,000 14,000 5,000 5,000 26% 74% 136%
9 20,000 19,000 1,000 1,000 5% 95% 105%
10 16,500 20,000 -3,500 3,500 21% 79% 83%
 11 17,500 16,500 1,000 1,000 6% 94% 106%
12 20,000 17,500 2,500 2,500 13% 87% 114%
205,00
Total 0 192,000 7,000 26,000 14% 86% 105%

Percentage Error =
∑ ( Absolute Error) = 26,000 =13 %
∑ ( Actual) 205,000

MAPE =
∑ ( Absolute Error) =
26,000
=13 %
∑ Actual x 100 % 205,000

9. Use the exponential smoothing with ɑ = 0.40 and an initial value of F1 = 50 for the
following time series.

Month Demand
January 60
February 70
March 55
April 60
May 45
June 60
July 65
Compute the following:

a. Percentage error
b. MAPE
c. Absolute accuracy percentage
d. Arithmetic accuracy

Actual Absolute Arithmeti

Deman Forecas Forecas Absolut Percentag Accurac c
Month d t t Error e Error e Error y Accuracy
a b c d e f g h

Formula b-c abs(d) e/b 1-f b/c

January 60 - - - - - -
February 70 60 10 10 14% 86% 117%
March 55 70 -15 15 27% 73% 79%
April 60 55 5 5 8% 92% 109%
 May 45 60 -15 15 33% 67% 75%
June 60 45 15 15 25% 75% 133%
July 65 60 5 5 8% 92% 108%
Total 415 350 5 65 19% 81% 104%

Percentage Error =
∑ ( Absolute Error) =
65
x 100% = 16%
∑ ( Actual) 415

MAPE =
∑ ( Absolute Error) =
65
x 100% = 16%
∑ Actual x 100 % 415

Absolute Accuracy = 100 – MAPE = 100% - 16% = 84%

10. The JAVILL Department Store has been an authorized dealer for flat TV for the past five
years. The numbers of flat TV sold each year is shown in the table.

Year Number of Flat TV

Sold
1 40

2 25

3 35

4 39

5 43

a. Graph this time series. Does linear trend appear?

b. Develop an equation for the linear trend component of the time series.
c. Use the developed trend equation from (b) to prepare for the sales in a year 5 and year
6.

Year (t) Number of Flat TV Sold 2

t tY
(Y)
1 40 1 40

2 25 4 50

3 35 9 105

4 39 16 156

5 43 25 215
 ∑t = 15 ∑Y = 182 ∑ty = 566
2
∑ t = 55

∑t 15 ∑Y 182
t= = = 3; Y= = = 36.4
n 5 n 5

[ ( 566 )−5 ( 3 ) ( 36.4 )] 20

b= 2 = =2 a = 36.4 – 2(3) = 30.4
[ ( 55−5 ( 3 ) ) ] 10

T5 = 30.4 + 2t = 30.4 + 2(5) = 40.4

T6 = 30.4 + 2t = 30.4 + 2(6) = 42.4

50
45
40
35
30
25
20
15
10
5
0
1 2 3 4 5
Column2

11. The ABAN Siomai House has six branches in Caloocan City. The profit and sales are shown
in table. Develop the regression equation from the data and predict profit for a store if the sale is
₱25,000.

Branches 1 2 3 4 5 6
Sales (1,000) 12 15 16 18 14 17
Profits (1,000) 7 9 10 12 10 13

Branches Sales Profits 2 XY

X
Y X
(1,000) (1,000)
1 12 7 49 84
2 15 9 81 135
3 16 10 100 160
 4 18 12 144 216
5 14 10 100 140
6 17 13 169 221
∑Y = 92 ∑X = 61 ∑X 2
= 643 ∑XY = 956

∑X 61
X= = = 10.16
6 6

∑Y 192
Y= = = 15.33
6 6
2
10.16 ¿
∑ XY −nXY 643−6 ¿ 21.48
b= 2 2 = = = 0.91
∑ X −n X 956−6 (10.16)(15.33) 23.64
¿
a = Y = bX = 15.33 – 0.91(10.16) = 6

Sales (₱1,000) = 6 + 0.91(Payroll)

= 6 + 0.91(25)

= 6 + 22.75

= 28.75

Sales = ₱ 28, 750