OM300 Homework8

OM300 Homework8

Question OM300: Homework #8
For problems 1 and 2, construct an EXCEL spreadsheet to do the calculations. Submit two
“screenshots” of your Excel spreadsheet. The first printout should show your solution, and the
second should display the formulas, gridlines, and the row and column headings.
Do problem 3 using Excel and Excel’s SOLVER. Submit two “screen snapshots” of your
EXCEL spreadsheet. The first printout should show your solution and the Solver dialog settings,
while the second should display the formulas, gridlines, and the row and column headings.

1. The following data are monthly sales of jeans at a local department store. Use this data to
answer the following questions.
Month Sales
January 55
February 47
March 50
April 40
May 30
June 45
a. (10) What are the naïve forecasts for February through July?
b. (15) What are the two-month moving average forecasts for March through July?
c. (15) What are the exponential smoothing forecasts for February through July using
? = 0.20? Hint: Use the naïve forecast to start the exponential smoothing process.

2. Compute the MAD, MSE, and Tracking Signal for the
a. (9) Naïve forecasts for February through June,
b. (9) Two-month moving average forecasts for March through June, and
c. (9) Exponential smoothing forecasts for February through June.
d. (8) Based on these results, which forecasting method would you recommend that the
store use to forecast the future monthly sales of jeans and why?

3. Construct a spreadsheet model to calculate the exponential smoothing forecasts for
February through June and the MSE of these forecasts.
Use Excel Solver to find the value of ? that minimizes the MSE of these forecasts.