homework solution weighted averages - exponential smoothing - trend cool-man air conditioners manual...
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Homework SolutionWeighted Averages - Exponential Smoothing - Trend
Cool-Man Air Conditioners
ManualManual
Computer-BasedComputer-Based
TM
MGMT E-5070
Part A
Cool-Man Air ConditionersCool-Man Air Conditioners
Year Sales
1st 450
2nd 495
3rd 518
4th 563
5th 584
6th ?
Sales of Cool-Man air conditioners have grown steadily over the past five years:
Cool-Man Air ConditionersCool-Man Air Conditioners
REQUIREMENT:
1. The sales manager had predicted, before the business started, that year 1’s sales would be 410 units. Using exponential smoothing with a weight of α = 0.30, develop forecasts for years 2 through 6 .
Cool-Man AiCool-Man Air Conditionerr Conditioner Exponential SmoothingSmoothing
2nd Year 1st Year 1st Year 1st YearForecast = Forecast + α ( Actual - Forecast )
= 410 units + 0.30 ( 450 units - 410 units )
= 410 units + 0.30 ( 40 units )
= 410 units + 12 units
= 422 units
Cool-Man AiCool-Man Air Conditionerr Conditioner Exponential SmoothingSmoothing
3rd Year 2nd Year 2nd Year 2nd YearForecast = Forecast + α ( Actual - Forecast )
= 422 units + 0.30 ( 495 units - 422 units )
= 422 units + 0.30 ( 73 )
= 422 units + 21.9 units
= 443.9 units
Cool-Man AiCool-Man Air Conditionerr Conditioner Exponential SmoothingSmoothing
4th Year 3rd Year 3rd Year 3rd YearForecast = Forecast + α ( Actual - Forecast )
= 443.9 units + 0.30 ( 518 units - 443.9 units )
= 443.9 units + 0.30 ( 74.1 )
= 443.9 units + 22.23 units
= 466.13 units
Cool-Man AiCool-Man Air Conditionerr Conditioner Exponential SmoothingSmoothing
5th Year 4th Year 4th Year 4th YearForecast = Forecast + α ( Actual - Forecast )
= 466.13 units + 0.30 ( 563 units - 466.13 units )
= 466.13 units + 0.30 ( 96.87 )
= 466.13 units + 29.06 units
= 495.19 units
Cool-Man AiCool-Man Air Conditionerr Conditioner Exponential SmoothingSmoothing
6th Year 5th Year 5th Year 5th YearForecast = Forecast + α ( Actual - Forecast )
= 495.19 units + 0.30 ( 584 units - 495.19 units )
= 495.19 units + 0.30 ( 88.8 )
= 495.19 units + 26.64 units
= 521.83 units
Cool-Man Air ConditionersCool-Man Air Conditioners
REQUIREMENT:
1. Using the smoothing coefficients of 0.60 and 0.90, develop forecasts for the sales of Cool- Man air conditioners.
Cool-Man Air ConditionersCool-Man Air Conditioners
YearYear Sales Forecast
11stst 450 -
22ndnd 495 434
33rdrd 518 470.6
44thth 563 499.0
55thth 584 537.4
66thth ? 565.6
Smoothing coefficient ( α ) = 0.60
Cool-Man Air ConditionersCool-Man Air Conditioners
YearYear Sales Forecast
11stst 450 -
22ndnd 495 446
33rdrd 518 490.10
44thth 563 515.21
55thth 584 558.20
66thth ? 581.40
Smoothing coefficient ( α ) = 0.90
Homework SolutionWeighted Averages - Exponential Smoothing - Trend
Cool-Man Air Conditioners
ManualManual
Computer-BasedComputer-Based
TM
Part A