Narsee Monjee Institute of Management Studies

MBA Core: Trimester III 2017-18

Title: Forecasting-I
Problems:

1) The accompanying table shows demand for the past 16 months:

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Month 1 2 3 4 5 6 7 8
Demand 8.9 9.5 7.9 8.2 8.3 8.9 9.2 8.9
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Month 9 10 11 12 13 14 15 16
Demand 9.1 9.6 10.3 9.6 9.0 8.8 9.4 8.9
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Predict the demand for the period 17th month using:
(i) Simple Average Method
(ii) 3 Months Moving Average
(iii) 4 Months Moving Average
(iv) 3 Months Weighted Moving Average (weights – 0.5, 0.3, 0.2)
(v) Exponential smoothing, using constants 0.2 & 0.4
Which method of forecasting will you choose for future forecasting? Why?

2) The accompanying table shows sales (in 1000s) for the past 12 weeks.
Month 1 2 3 4 5 6 7 8
Sales 17 21 19 23 18 16 20 18
Month 9 10 11 12
Sales 22 20 15 22
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Predict the demand for the period 13th month using:
(i) Simple Average Method
(ii) 3 Months Moving Average
(iii) 3 Months Weighted Moving Average
(iv)Exponential smoothing, using constants 0.2 & 0.4
Which method of forecasting will you choose for future forecasting? Why?

3) It is surmised that the monthly consumption of a spare part, in a large textile mill, is subject to
random fluctuations with no significant trend or seasonal variations. It is proposed to use a single
parameter exponential smoothing method for one-month ahead forecast. Table below shows the
consumption data of the past 10 months. Compute the forecasts using a smoothing constant of α=
0.9 and α = 0.5. Make a comparative evaluation on the basis two measures and assess which
smoothing constant will give better forecasts.
Assume forecast for month 1 as 170.

Month 1 2 3 4 5 6 7 8 9 10
Sale 160 110 130 160 180 150 200 220 180 150

4) Month wise demand during January-November of a particular item is given below:

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Month Actual demand
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January 2000
1
 February 1350
March 1950
April 1975
May 3100
June 1750
July 1550
August 1300
September 2200
October 2770
November 2350
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(i) Forecast demand for December, by taking =0.1, 0.5 and 0.9.
(ii) Compute mean absolute deviation (M.A.D.) and mean squared error (M.S.E.) in
each case and comment on selection of .

5) The accompanying table shows sales (in thousands of units) for the past 16 Quarters:
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Year 1 2
Quarter 1 2 3 4 1 2 3 4
Sales 4.8 4.1 6.0 6.5 5.8 5.2 6.8 7.4
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Year 3 4
Quarter 1 2 3 4 1 2 3 4
Sales 6.0 5.6 7.5 7.8 6.3 5.9 8.0 8.4
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Calculate the Seasonal Index.

6)The accompanying table shows sales (in thousands of units) for the past 16 Quarters:
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Year 1 2
Quarter 1 2 3 4 1 2 3 4
Sales 28 37 33 24 27 40 30 23
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Year 3 4
Quarter 1 2 3 4 1 2 3 4
Sales 31 36 33 30 31 39 36 26
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Predict the demand for the four Quarters of the 5th Year

7)The accompanying table shows sales for the past 20 Quarters:

Year Q1 Q2 Q3 Q4
2006 161466 240088 275164 294985
2007 239542 330515 396190 389272
2008 421679 407616 469532 452050
2009 421683 407613 572196 592718
2010 620183 446454 712062 685419
Predict the demand for the four Quarters of the 6th Year.