Question

Answered
1) Consider the following time series data.
Week 1 2 3 4 5 6
Value 18 13 16 11 17 14
a. Construct a time series plot. What type of pattern exists in the data?
b. develop a three-week moving average for this time series. Compute mSe and a
forecast for week 7.
c. use a 5 0.2 to compute the exponential smoothing values for the time series.
Compute mSe and a forecast for week 7.
d. Compare the three-week moving average forecast with the exponential smoothing
forecast using a 5 0.2. Which appears to provide the better forecast based on mSe?
explain.
e. use trial and error to find a value of the exponential smoothing coefficient a that
results in a smaller mSe than what you calculated for a 5 0.2.

2. Consider the following time series data. Month 1 2 3 4 5 6 7...

Month 1 2 3 4 5 6 7
Value 24 13 20 12 19 23 15
a. Construct a time series plot. What type of pattern exists in the data?
b. Develop a three-week moving average for this time series. Compute MSE and a forecast for
week 8.
c. Use ɑ = 0.2 to compute the exponential smoothing values for the time series. Compute MSE
and a forecast for week 8.
d. Compare the three-week moving average forecast with the exponential smoothing forecast
using ɑ = 0.2. Which appears to provide the better forecast based on MSE?
e. Use trial and error to find a value of the exponential smoothing coefficient ɑ that results in a
smaller MSE than what you calculated for ɑ = 0.2.

3) Step-by-step explanation
a) Four week moving average means taking the average of the values of 4 weeks ahead of
the current week.
For instance, for forecast of 5th week, the average of week 1 to week 4 is calculated.
For five week moving average, the data of 5 weeks are taken. The calculations are as
follows.

=====================================================================

(b)
MSE: Mean Squared Error.
Step 1: Calculate the error (Actual - Forecast) for each week.
Step 2: Calculate square of the error (Actual - Forecast)^2
Step 3: Calculate average of the squared errors (Sum of all squared errors)/Number of
observations
Please find the image attached.

MSE for four week moving average = 9.6484

MSE for five week moving average = 7.4057

MSE for five week moving average is the least. Hence, 5 week moving average is the best
for computation.

Step-by-step explanation

For alpha=0.1,

Image transcription text

Time period Actual Value(A) Forecast(F) Forecast error E=A-F Squared Forecast Error
MAPE 7 17
2 21 17.00 4.00 16.00 0.1905 3 19 17.40 1.60 2.56 0.0842 4 23 17.56 5.44 29.59 0.2365 5
18 18.10
0.10 0.01 0.0058 6 16 18.09 2.09 4.38 0.1309 20 17.88 2.12 4.48 0.1058 8 18 18.10
0.10 ... Show more

For alpha =0.2,

Image transcription text

Time period Actual Value(A) Forecast(F) Forecast error E=A-F Squared Forecast Error
MAPE 7 17
2 21 17.00 4.00 16.00 0.1905 3 19 17.80 1.20 1.44 0.0632 4 23 18.04 4.96 24.60 0.2157 5
18 19.03
1.03 1.07 0.0573 6 16 18.83 2.83 7.98 0.1766 7 20 18.26 1.74 3.03 0.0870 8 18 18.61
0.61... Show more

Applying the MSE measure:

Prefer : alpha=0.1
If you liked the explanation, please give me a thumbs up.
5. a) Capacity refers to the upper limit of the rate of output.in the given operation, operation
2 yields maximum output rate. Moreover, the system suffers from bottleneck at operation 3.
Therefore, the maximum capacity of the process is 11/ hr.
 
b) Effects of the action on the process are as shown below:
I. Increase the capacity of Operations 1 by 15 percent: The new capacity of operation 1 will
be as shown below:
New capacity = 12+ 15% of 12
But the process will still suffer the bottleneck and its capacity will remain to 11/ hr.
II. Increase the capacity of Operations 2 by 10 percent: The new capacity of operation 1 will
be as shown below:
New capacity = 15+ 10% of 15
But the process will still suffer the bottleneck and its capacity will remain to 11/ hr.
III. Increase the capacity of Operations 3 by 10 percent: The new capacity of operation 1 will
be as shown below:
New capacity = 11+ 10% of 11

Therefore, action 3. increase the capacity of operation 3 by 10 percent should be adopted.

This action will influence the capacity of the process and the maximum capacity of the
process will increase to 12.10/hr. from 11/hr. Therefore, this action will limit the bottleneck,
will increase the utilization as well as efficiency ratio of the process.

6. ANSWER
1. Finding Utilization and Efficiency for each situation.
Utilization = Actual output
DesignCapacity .
Efficiency = Actual Output
Effective capacity
a. Actual Output = 7, Design Capacity = 10, Effective Capacity = 8.
I. Utilization = 7
10 ii. Efficiency = 7
8
= 0.7. = 0.875
b. Actual Output = 4, Design Capacity = 6, Effective Capacity = 5.
I, Utilization =( 48
)100 ii. Efficiency = (45
)100
= 66.7% = 80%
c. YES, this is because with the Efficiency one is assured of quality product or quality service, therefore
with the higher efficiency, utilization is estimated to be higher in accordance.