Supply Chain Analytics 2020

Week 3 Assignment

1. Which of the following is most appropriate?

(a) Qualitative forecasting is slightly accurate.
(b) Quantitative forecasting is most accurate.
(c) Forecasting always has no errors.
(d) None of the above

2. Which of the following is not correct?

(a) Forecasting accuracy is independent of time length of forecast.
(b) Long term forecasts are less accurate as compared to short term forecasts.
(c) Both (a) and (b)
(d) None of the above

3. Refer following relationship:

Observed demand = systematic component + random component
Which of the following is/ are included in systematic component?
(a) Trend
(b) Seasonality
(c) Deseasonalized demand
(d) All of the above

4. In a time series data, current deseasonalized demand is 12 units, additive trend is 3 units per
month and monthly seasonal factor which is multiplicative is 0.5, what is the systematic
component?
(a) 6
(b) 7.5
(c) 10
(d) 11

5. In a time series data, current desasonalized demand is 150 units, multiplicative trend is 7
units per month and monthly multiplicative seasonal factor is 1.2, what is the systematic
component?
(a) 1260
(b) 6000
(c) 1060
(d) 1120

6. A wholesaler observed monthly demand of mobile phones for past five months as follows:

Month Demand
January 100
February 110
March 124
April 110
May 130

Using a four period moving average, estimate the forecast for the month of June.
(a) 111
(b) 114
(c) 118
(d) 121

7. A wholesaler observed monthly demand of mobile phones for past five months as follows:

Month Demand
January 100
February 110
March 124
April 110
May 130

Using a three period moving average, estimate the forecast for the month of June, if W 1 =
0.4, W2 = 0.35, and W3 = 0.3.
(a) 120.6
(b) 127.7
(c) 114
(d) 124

8. The term ‘β’ in exponential smoothening denotes:

(a) smoothening the fluctuations of trend value
(b) smoothening the fluctuations of base value
(c) Both (a) and (b)
(d) None of the above

9. Following data is available from a forecasting exercise:

Period Actual demand Forecast

1 85 100
2 98 100
3 105 100
4 110 100
5 111 100
6 120 100
What is MAD ?

(a) 7.67
(b) 10.5
(c) 7.67
(d) 11.5
(e) 4.83

10. Which one of the following is the qualitative method of forecasting?

(a) Delphi
(b) Time Series
(c) Causal
 (d) None of the above

1. Options are not correct 2.A 3.D 4.B 5.A 6.C 7.B 8.A 9.B10.A
Solution

Q4 In this case systematic component = (deseasonalized demand + trend) x seasonal factor

Therefore, systematic component = (12 +3 ) x 0.5 = 7.5

Answer is B.

Q5 In this case systematic component = desesonalized demand x trend x seasonal factor

Therefore, systematic component = 150 x 7 x 1.2 = 1260

Answer is A .

Q6 F (June ) = 1/4 (D( Feb) +D (may) + D (April) + D (March))

Therefore F (june) = 1/4 (110+ 130 + 110 + 124) = 118

Answer is C.

Q7 F (June ) = w1 x D (May ) + w2 X D (April) + w3 x D(March)

= 0.4x 130 + 0.35 x 110 + 0.3 x 124 = 127.7

Answer is B.

Q9 E(t) = F(t) – D (t)

Therefore E (1) = 15, E (2) = 2, E(3) = -5, E(4) = -10, E (5) = -11, E (6) = -20

Absolute deviations are E1 = 15, E (2) = 2, E(3) = 5, E(4) = 10, E (5) = 11, E (6) = 20

MAD = 1/6 (IE1I +IE2I +IE3I +IE4I +IE5I +IE6I)

= 1/6 (15 +2 + 5 + 10 + 11 + 20 ) = 10.5

Answer is B.