Forecasting
Problem #5, Taylor text, p.728
Please show manually calculation and Excel calculation. Send Excel and word files with solution.
The chairperson of the department of management at State University wants to forecast the
number of students who will enroll in production and operations management (POM) next
semester, in order to determine how many sections to schedule. The chair has accumulated the
following enrollment data for the past eight semesters:
Semester Students Enrolled in
POM
1 400
2 450
3 350
4 420
5 500
6 575
7 490
8 650
a. Compute a three-semester moving average forecast for semesters 4 through 9.
b. Compute the exponentially smoothed forecast (a = .20) for the enrollment data.
c. Compare the two forecasts by using MAD and indicate the more accurate of the two. Decision Analysis

Problem 2
The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature.
Decision
Alternative
State of Nature (S1, S2, S3)
S1 S2 S3
d1 250 100 25
d2 100 100 75

a. Construct a decision tree for this problem.
b. If the decision maker known nothing about the probabilities of the three states of nature, what is the recommended decision using the 1)optimistic, 2) conservative, and 3) minimax regret approaches?
Please show your solution with details.
c. Suppose that the probabilities that S1, S2, and S3 will occur are 0.5, 0.4, and 0.1, respectively. What option should we choose using the expected value approach? Please show your solution with details.