1. In the Fast Shop Market example in this chapter, Alternative II was to add a new checkout counter at the market. This alternative was analyzed using the single-server model. Why was the multiple-server model not used?
2. The manager of the Carpet City outlet needs to make an accurate forecast of the demand for Soft Shag carpet (its biggest seller). If the manager does not order enough carpet from the carpet mill, customers will buy their carpet from one of Carpet City's many competitors. The manager has collected the following demand data for the past 8 months:
|
Month
|
Demand for Soft Shag Carpet (1,000 yd.)
|
|
1
|
8
|
|
2
|
12
|
|
3
|
7
|
|
4
|
9
|
|
5
|
15
|
|
6
|
11
|
|
7
|
10
|
|
8
|
12
|
a. Compute a 3-month moving average forecast for months 4 through 9.
b. Compute a weighted 3-month moving average forecast for months 4 through 9. Assign weights of 0.55, 0.33, and 0.12 to the months in sequence, starting with the most recent month.
c. Compare the two forecasts by using MAD. Which forecast appears to be more accurate?
The Jersey Dairy Products Company produces cheese, which it sells to supermarkets and food processing companies. Because of concerns about cholesterol and fat in cheese, the company has seen demand for its products decline during the past decade. It is now considering introducing some alternative low-fat dairy products and wants to determine how much available plant capacity it will have next year. The company has developed an exponential smoothing forecast with a = .40 to forecast cheese demand. The actual demand and the forecasts from the model are as follows:
Assess the accuracy of the forecast model by using MAD and cumulative error. If the exponential smoothing forecast model does not appear to be accurate, determine whether a linear trend model would provide a more accurate forecast.