Issue 18/08/2011 Revision Date 10/06/2015 Form No. ECT/ACA/F01.

03

Assignment
Question 1: Multiple choice Questions (2 Marks, 0.5 Mark each)
Find the correct answer for each of the following multiple-choice questions:
1. High customer contact and labor intensiveness are characteristics of:
a. Services
b. Manufacturing
c. Back office operations
d. Quasi-Manufacturing
2. In OM, which of the following is an input resource of transformation processes?
a. Goods
b. People
c. Services
d. None of the above
3. Reasons to globalize operations management do not include:
a. Understand markets
b. Reduce costs
c. Attract and retain global talent
d. Protect local producers from outside competitors.
4. In OM, productivity is the ratio of:
a. Input to output
b. Labor to investment
c. Output to input
d. Budget to expenditure
Issue 18/08/2011 Revision Date 10/06/2015 Form No. ECT/ACA/F01.03

Assignment
Question 2: Problem solving (10 Marks)
The historical data below is on the monthly demand on a product in number of units:

Period 1 2 3 4 5 6
Month Jan. Feb. Mar. Apr. May Jun.
Demand 50 55 42 68 68 88

1. Compute the Demand forecast for the month of July using the moving average of
order 3. Compute the whole MA series (show computation for July). (2 Marks)
N=3
April forecast = (50 + 55 + 42) / 3 = 49
May forecast = (55 + 42 + 68) / 3 = 55
June forecast = (42 + 68 + 68) / 3 = 59.33
July forecast = (68 + 68 + 88) / 3 = 74.67

2. Compute the Demand forecast for the month of July using the weighted moving
average of order 3, the weights from the most recent month are: 60%, 30%, and
10%. Compute the whole WMA series (show computation for July). (2 Marks)
W1 = 0.60, W2 = 0.30, W3 = 0.10
April Forecast = (0.60 x 42) + (0.30 x 55) + (0.10 x 50) = 46.7
May Forecast = (0.60 x 55) + (0.30 x 42) + (0.10 x 68) = 52.4
June Forecast = (0.60 x 68) + (0.30 x 68) + (0.10 x 42) = 65.4
July Forecast = (0.60 x 68) + (0.30 x 68) + (0.10 x 88) = 90.4

3. Compute the Demand forecast for the month of July using the exponential smoothing
with α = 0.3, assuming that F1 = 50 units (show computation for July). (2 Marks)
March Demand forecast = (0.30 x 55) + (0.70 x 50)= 51.5
April Demand forecast = (0.30 x 42) + (0.70 x 51.5) = 48.65
May Demand forecast= (0.30 x 68) + (0.70 x 48.65) = 54.455
June Demand forecast = (0.30 x 54.455) + (0.70 x 88) = 58.5185
July Demand forecast = (0.30 x 88) + (0.70 x 58.5185) = 67.36295
Issue 18/08/2011 Revision Date 10/06/2015 Form No. ECT/ACA/F01.03

Assignment

4. Calculate the tracking signal TS for exponential smoothing and plot it (show computation
for March). Based on the plot, is the ES forecast in control? Explain why. (4 Marks)
tracking signal = Sum|errors|/MAD
Tracking signal= -1.0112

Since the tracking signal is far below the appropriate threshold that is within the range, the
forecasting model described is not suitable for predicting future forecasts.

Question 3: Problem solving ( 8 Marks)

A restaurant chain owner would like to analyze the demand in his different branches in
order to manage his budget better.
His supply chain manager proposes to him to apply the linear regression as a forecasting
method to control better the monthly purchases of the cheese and reduce the waste.
The supply chain manager did extract the history of consumption of cheese by
Kilograms from the information system, they are represented in the following table:
x, the Period y, the demand
1 36
Issue 18/08/2011 Revision Date 10/06/2015 Form No. ECT/ACA/F01.03

Assignment
2 38
3 39
4 40
5 36
6 45
7 45
8 40

1. Using the linear regression method calculate the forecast for the period number 9.
Show the steps of you work. (6 Marks)

b=∑ xy−n xy ÷ ∑ x −n x
2 2

∑ xy = 1474 x =4.5 y = 39.88

b = 1474-8 x 39.88 x 4.5/(204)-8 x (4.52)

b = 0.91

a= y−b x
a = 39.88-(0.91)(4.5)
a = 35.78

Y = 35.78 + 0.91(x)
Y = 35.78 + 0.91(9) = 44
Issue 18/08/2011 Revision Date 10/06/2015 Form No. ECT/ACA/F01.03

Assignment
2. Plot the graphic representation of the actual demand and the liner regression. (2
Marks)

Linear Regr es s ion

50
45
40
35
30
damand

25
20
15
10
5
0
1 2 3 4 5 6 7 8 9
period