1. A dry cleaner uses exponential smoothing to forecast equipment usage at its main plant. August usage was forecasted to be 53 percent of capacity; actual usage was 52 percent of capacity. A smoothing constant of .05 is used.
a. Prepare a forecast for September. (Round your final answer to 2 decimal places.)
b. Assuming actual September usage of 60 percent, prepare a forecast for October usage. (Round your answer to 2 decimal places.)
2. Long-Life Insurance has developed a linear model that it uses to determine the amount of term life insurance a family of four should have, based on the current age of the head of the household. The equation is:
y = 157 -0.50x
where
y = Insurance needed ($000)
x = Current age of head of household
b. Use the equation to determine the amount of term life insurance to recommend for a family of four if the head of the household is 47 years old. (Round your answer to 2 decimal places.)
3. An electrical contractor’s records during the last five weeks indicate the number of job requests:
Week: 1 2 3 4 5
Requests: 28 24 22 23 30
Predict the number of requests for week 6 using each of these methods:
a. Naive.
b. A four-period moving average. (Round your answer to 2 decimal places.)
c. c. Exponential smoothing with α = 0.25. Use 27 for week 2 forecast. (Round your intermediate forecast values and final answers to 2 decimal places.)
4. The manager of a fashionable restaurant open Wednesday through Saturday says that the restaurant does about 30 percent of its business on Friday night, 30 percent on Saturday night, and 20 percent on Thursday night. What seasonal relatives would describe this situation? (Round your answers to 2 decimal places.)
5. Compute seasonal relatives for this data using the simple averaging (SA) method:
Quarter Year 1 Year 2 Year 3 Year 4
1 2 1 1 0
2 6 6 7 6
3 1 4 5 8
4 4 4 6 8
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(Round all your answers to three decimal points.)
