Practice Midterm with Solution
Autor: goude2017 • March 5, 2018 • 1,109 Words (5 Pages) • 520 Views
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[pic 19]
[pic 20][pic 21]
Forecast annual sales in 2015 = [pic 22]
Forecast quarterly sales of 2015: annual sales[pic 23]
Winter
[pic 24]
Spring
[pic 25]
Summer
[pic 26]
Fall
[pic 27]
Question 4: (10 points)
- (8 points) A forecasting method gives the forecasts as shown in the following table. Compute MAD and tracking signal.
Period
[pic 28]
Demand
[pic 29]
Forecast
[pic 30]
Error
[pic 31]
Cumulative Error
[pic 32]
Absolute Error
[pic 33]
Cumulative Absolute Error Over Periods[pic 34]
[pic 35]
MAD
[pic 36]
Tracking Signal
[pic 37]
1
39
39.00
----
----
----
----
----
----
2
41
39.00
2
2
2
2
2
1
3
42
39.60
2.4
4.4
2.4
4.4
2.2
2
4
44
40.32
3.68
8.08
3.68
8.08
2.69
3
5
47
41.42
5.58
13.66
5.58
13.66
3.41
4
- (2 points) Does the forecasting method demonstrate a consistent bias? Why or why not?
Yes, TS = 4 > 3.
Question 5: (10 points)
The Shotz Brewary sells 4320 barrels of ale every day. The ale is stored at an annual cost of $50 per barrel. The order cost is $300 per order. Assume that there are 360 days in a year.
- (5 points) Determine an economic order quantity, cycle time and the minimum total annual inventory cost.
units[pic 38]
Cycle time = day or Cycle time = year[pic 39][pic 40]
TC = [pic 41]
- (5 points) Suppose that Shotz Brewary can produce ale 4860 barrels per day. Determine an economic production run quantity, cycle time and the total annual inventory cost.
units[pic 42]
Cycle time = days or Cycle time = year[pic 43][pic 44]
TC = [pic 45]
Question 6: (10 points)
Three items are produced in a small fabrication shop. The shop management has established the requirement that the shop never have more than $45,000 invested in the inventory of these items at one time. The management uses a 20% annual interest charge to compute the holding cost. The relevant cost and demand parameters are given in the following table. What lot sizes should the shop be producing so that they do not exceed the budget?
Item
1
2
3
Demand
1960
1260
750
Variable cost
150
380
185
Set up cost
120
170
90
Solution
[pic 46]
[pic 47]
[pic 48]
- If EOQ value for each item is used, maximum investment in inventory would
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