1.

Mary has invested in a stock mutual fund and she is considering liquidating and investing in
a bound fund. She would like to forecast the price of the stock fund for the next month
before making decision. She has collected the following data on the average price of the
fund during the past 20 months.

Fund
Month Price
1 63.250
2 60.125
3 61.750
4 64.250
5 59.375
6 57.875
7 62.250
8 65.125
9 68.250
10 65.500
11 68.125
12 63.250
13 64.375
14 68.625
15 70.125
16 72.750
17 74.125
18 71.750
19 75.500
20 76.750

1. Using a three-month moving average, forecast the fund price for

month 21. Round your answer to two decimal places.
2. Compute an exponentially smoothed forecast using =0.4 and forecast the fund price for month 21.
Round your answer to two decimal places.
3. Develop a linear trend forecast to forecast the fund price for month 21. Round your answer to two decimal
places.
4. Calculate the MAD for the 3-month moving average, linear trend, and smoothed forecast. Which method
is the most accurate?
2. Ohio Swiss Milk Products manufactures and distributes ice cream in Ohio, Kentucky, and
West Virginia. The company wants to expand operations by locating another plant in
northern Ohio. The size of the new plant will be a function of the expected demand for ice
cream within the area served by the plant. A Market survey is currently under way to
determine that demand.

Ohio Swiss wants to estimate the relationship between the manufacturing cost per gallon
and the number of gallons sold in a year to determine the demand for ice cream
and, thus, the size of the new plant. The following data have been collected:
Plant Cost per Thousands
Thousand of Gallons
Gallons Sold (X)
1 $1,015 416.9
2 973 472.5
3 1,046 250
4 1006 372.1
5 1058 238.1
6 1,068 258.6
7 967 597
8 997 414
9 1,044 263.2
10 1,008 372

Develop a regression equation to forecast the cost per gallon as a function of the number of gallons
produced. What is the R2 value? Round your answer to two decimal points

[Use the CORREL, SLOPE and INTERCEPT functions in excel to get to your answer. The CORREL
function is used to calculate the value of R2]

3. Please read the Ariba Med-X Case and answer the questions below.

Available at http://cb.hbsp.harvard.edu/cbmp/access/51873999

a. Which of the two components are underperforming according to the plan? How do you know this?
b. Are the components of the project within budget? How do you know?
c. What can you conclude by looking at the combined earned value data for the entire project?
d. Why did Terry Baker think that the project was going according to plan the entire time?
e. How much longer will the project take?
f. What should Martin have done earlier in the project timeline to prevent delays?
g. What should Martin do when managing future projects to prevent similar problems from developing?