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MKTG 3310 Business Logistics Homework Problems 1
1) Over the past three months, the demand for a product has been 260, 265, and 276. Calculate the three-month moving average forecast for month 4. If the actual demand in month 4 is 251, calculate the forecast for month 5.
2) Monthly demand over the past 10 months is given in what follows:
MONTH ACTUAL DEMAND FORECAST
1 102
2 91
3 95
4 105 104+91+95/3=96
5 94 91+95+105/3=97
6 100 95+105+94/3=98
7 106 105+94+100/3=99.6
8 95 94+100+106/3=100
9 105 100+106+95/3=100.3
10 98 106+95+105/3=108
11 95+105+98/3=99.3

Using a three-month moving average, calculate the forecasts for months 4, 5, 6, 7, 8, 9, 10, and 11.
3) If the forecast for June was 125, and actual demand was 131, what would be the forecast for July if the smoothing constant (α) is 0.20? If July demand turns out to be 130, calculate forecast for August. Use exponential smoothing for your calculation. July forecast(0.02)(131)+(1-0.02)(125)=126.2
August forecast (0.02)(130)(1-0.02)(126.2)=126.96
4) Given the following forecast and actual demand, calculate the mean absolute deviation (MAD).

PERIOD FORECAST ACTUAL DEMAND error ABSOLUTE DEVIATION (ERROR)
1 100 80 80-100=-20 20
2 100 105 105-100=5 5
3 100 110 110-100=10 10
4 100 90 90-100=-10 10
5 100 95 95-100=-5 5
TOTAL 50
50/5=10

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