1.

Year 1 2 3 4 5 6 7 8 9 10 11
Demand 7 9 5 9 13 8 12 13 9 11 7

a) Graph the previous data. Do you observe any trends, cycles or

random variations?
b) Starting in year 4 and up to year 12, forecast the demand
using 3-year moving averages. Graph your forecast on the same one.
graph of the original data.
c)Starting in year 4 and until year 12, forecast the demand.
using a 3-year moving average with weights of .1, .3, and .6,
using 6 for the most recent year. Plot your forecast on the same one.
graph.
d) When comparing each forecast against the original data, which one seems
provide better results?

2. The monthly sales at Telco Batteries, Inc. were as follows:

My Sales
January 20
February 21
March 15
April 14
May 13
June 16
July 17
August 18
September 20
October 20
November 21
December 23

a) Graph the monthly sales data.

b) Forecast sales for January using each of the techniques
following:
i) Intuitive method,
a 3-month moving average,
iii) A weighted moving average of 6 months using 1, .1, .1, .2, .
2 y .3, with the highest weights given to the most recent months.
iv) Exponential smoothing with a = .3 and a forecast for
September 18.
v) A trend projection.
c) With the provided data, what method would allow you to develop the
sales forecast for next month of March?

3. The daily maximum temperatures in Saint Louis during the last

The weekly scores were as follows: 93, 94, 93, 95, 96, 88, 90 (yesterday).

a) Forecast the maximum temperature for today using a moving average

 of 3 days.
b) Forecast the maximum temperature for today using a moving average
2 days.
c)Calculate the mean absolute deviation based on a moving average of
2 days.
d) Calculate the mean squared error for a 2-day moving average.
e)Calculate the mean absolute percentage error for the moving average of 2
days.

4. Below are two weekly forecasts made

through two different methods for the number of gallons of gasoline,
in thousands, demanded at a local gas station. Also shown are the
real levels of demand, in thousands of gallons:

Forecasts
Week Method 1 Method 2 Real demand
1 0.90 0.80 0.70
2 1.05 1.20 1.00
3 0.95 0.90 1.00
4 1.20 1.11 1.00

What are the values of the MAD and MSE for each method?

5. Consider the following levels of real demand (At) and forecasted

(Ftfor a product:

Time period Real demand Forecasted demand

t A1 Ft
1 50 50
2 42 50
3 56 48
4 46 50
5

The first forecast, Ft, it was obtained by observing A1and establishing F1equal to A1.
The subsequent forecasts were obtained through smoothing.
exponential. Using the exponential smoothing method, find the
forecast for the fifth period. (Suggestion: First, it is necessary to find
the smoothing constant, α).

6. Howard Weiss, owner of a musical instrument distribution store

musicals, do you think the demand for low drums might be
related to the number of television appearances of the popular group
from the band Stone Temple Pilots during the last month. Weiss has compiled
the data shown in the following table:

Demand for low drums 3 6 7 5 10 7

Television appearances
3 4 7 6 8 5
De Slone Temple Pilots
 a) Graph with these data to know if a linear equation could
describe the relationship between the group's appearances on television
and the sale of low drums.
b) Use the least squares regression method to obtain a
forecasting equation.
c) What would be your estimate of the sales of low drums if the Stone
Temple Pilots would have appeared nine times on television that month
anterior?
d)What are the correlation coefficient (r) and the coefficient of
determination (r2) for this model, and what do they mean?

In the past, the distributor Arup Mukherjee sold an average of

1,000 radial tires each year. In the previous two years, it sold 200 and
250, respectively, during the autumn, 350 and 300 in winter, 150 and 165
in spring, and 300 and 285 in summer. With a significant expansion in
door, Mukherjee projects that sales will increase next
año a 1,200 llantas radiales. ¿Cuál será la demanda en cada estación?

8. Brian Buckley has developed the following forecasting model:

= 36 + 4.3x

where demand for Aztec air conditioners and

x = the outside temperature (°F)

a) Forecast the demand for Aztec when the temperature is 70°F.

b) What is the demand when the temperature is 80°F?
c) What is the demand when the temperature is 90°F?

9. Sundar Balakrishnan, general manager of Precision Engineering

Corporation (PEC) believes that the engineering services of companies
of road construction that hire your company are related
directly with the volume of road construction business
that hires the companies located in its geographical area. It
ask if it really is this way, and if it is, would this help him
information to better plan your operations by forecasting the quantity
of their engineering services required by companies of
construction in each quarter of the year? In the following table is
they present the sales data of their services and total amounts of the
road construction contracts from the last 8 quarters:

Trimester 1 2 3 4 5 6 7 8
Sales of services of 8 10 15 9 12 13 12 16
PEC (in thousands of dollars)
Signed contracts 153 172 147 178 185 199 205 226
(in thousands of dollars)

a) Using this data, develop a regression equation to predict

the level of demand for PEC services.
b) Determine the correlation coefficient and the standard error of the
estimate.
 RESOLVED PROBLEMS

Sales of the popular Volkswagen (VW) Beetle have grown from

consistently over the last 5 years in the establishments of
Nevada (see the table below). The sales manager forecasted in 2002
That the sales of 2003 would be 410 VW. Use exponential smoothing.
with a weighting of a = .30 to develop forecasts for 2004 to
2008.

Yes Sales Forecast

2003 450 410
2004 495
2005 518
2006 563
2007 584
2008 ?

2. In Example 7, we apply exponential smoothing with adjustment of

trend to forecast the demand for a control equipment
pollution in months 2 and 3 (based on the data provided for
9 months). Let's continue now with this process for month 4.

We want to confirm the forecast for month 4 shown in the table.

4-1. (page 120) and figure 4.3. For month a. A4= 19, conα= 2 yβ=4.

[Link] the Toronto Towers Plaza hotel, they have the room registration data.
of the last nine years. To project future occupancy, the
the administration wants to determine the mathematical trend of the record
guests. This estimate will help determine if it is necessary to
future expansion of the hotel. Given the following time series, develop
a regression equation that relates the records with time (for
For example, a trend equation). Then forecast the records.
For the year 2009. The room registration is in thousands of units:

1999: 17 2000: 16 2001: 16 2002: 21 2003: 20

2004: 20 2005: 23 2006: 25 2007; 24

4. The quarterly demand for Ford F150 trucks for a distributor of

automobiles in New York are forecasted using the following equation:

= 10 + 3 x
 donde x = trimestres, y:

First quarter of 2006 = 0

Trimestre II de 2006 = 1
Third quarter of 2006 = 2
Fourth quarter of 2006 = 3
First quarter of 2007 = 4 etc.
y:
quarterly demand

The demand for trucks is seasonal, and the indexes for quarters I, II,
III and IV are 0.80, 1.00, 1.30, and 0.90, respectively. Forecast the
demand for each quarter of 2008. Then seasonally adjust each forecast.
para ajusfarlo a las variaciones trimestrales.

Questions for analysis

1. What is a qualitative forecasting model and when is it appropriate?

usage?
2. Identify and briefly describe the two general approaches of
forecast.
3. Identify the three time horizons for forecasts. Establish
an approximate duration for each one.
4. Briefly describe the necessary steps to develop a system.
of forecasts.
5. A skeptical administrator asks what it can be used for.
Medium-term forecast; suggest three possible uses or purposes.
6. Explain which forecasting techniques, such as moving averages,
weighted moving averages and exponential smoothing are not
suitable for data series that show a trend.
7. What is the basic difference between weighted moving averages and
exponential smoothing?
8. What are the three methods used to measure accuracy of
Any forecasting method? How would you determine if it is better?
a time series regression or an exponential smoothing for a
specific application?
9. Investigate and briefly describe the Delphi method. How could you
Did any of the bosses you have worked for use it?
10. What is the main difference between a time series model and a
associative model?
[Link] what a time series is.
12. What effect does the value of the smoothing constant have on the
weight given to recent values?
13. Explain the value of seasonal indices in forecasting. What is their importance?
What are the differences between cyclical patterns and seasonal patterns?
14. Which forecasting technique gives more importance to recent values?
How does this do?
15. Explain in your own words what an adaptable forecast is.
16. What is the purpose of control signals?
17. Explain in your own words what the meaning of the coefficient is.
of correlation. Analyze the meaning of a negative value of the coefficient of
correlation.
18. What is the difference between a dependent variable and an independent variable?
independent?
19. Mention some examples of industries affected by this.
functionality. Why would these businesses wish not to depend on the
seasonality?
20. Give some examples of industries where demand forecasting is used.
depende de la demanda de otros productos.
21. What happens to our ability to predict when
Do we forecast increasingly distant periods in the future?