Excercise 7-2: Hot Pizza

Week Demand Week Demand Week Demand

1 110 5 92 9 118
2 118 6 115 10 106
3 119 7 90 11 95
4 134 8 106 12 93
1.
Reformat
data

MOVING AVERAGE ERRORS

Lt = (Dt + Dt-1 + ...+ Dt-N+1)/N
Percent
Period Demand Level Forecast Calculate Et At bias MSE MAD Error MAPE TS
Graph Moving Average Actual Demand Forecasted Demand
Errors Using 140
1 110 Moving
2 118 Average 130
3 119

Unit Demand
4 134 120 120
5 92 116 120 28 28 28 798 28 31 31 1.00 110
6 115 115 116 1 1 29 399 15 1 31 2.00
7 90 108 115 25 25 54 475 18 28 31 3.00 100
8 106 101 108 2 2 56 357 14 2 31 4.00 90
9 118 107 101 -17 17 39 345 15 15 31 2.64
10 106 105 107 1 1 40 288 12 1 31 3.21 80
11 95 106 105 10 10 50 261 12 11 31 4.13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
12 93 103 106 13 13 63 250 12 14 31 5.17 Periods
13 103 Estimate of standard deviation of forecast error: 15.23
14 103
15 103
16 103
2. Start with
reformatted
data again.

EXPONENTIAL SMOOTHING
Alpha = 0.1 ERRORS
Percent
Graph
Period Demand Level Forecast Calculate Et At bias MSE MAD Error MAPE TS
Using EXPONENTIAL SMOOTHING
0 108 Errors Exponential Actual Demand Forecasted Demand
1 110 108 108 -2 2 -2 4 2 2 2 -1.00 Smoothing 140
2 118 109 108 -10 10 -12 50 6 8 5 -2.00
3 119 110 109 -10 10 -22 65 7 8 6 -3.00 130
4 134 113 110 -24 24 -45 191 11 18 9 -4.00

Unit Demand
5 92 110 113 21 21 -25 237 13 22 12 -1.89 120
6 115 111 110 -5 5 -29 201 12 4 10 -2.50
7 90 109 111 21 21 -8 235 13 23 12 -0.65 110
8 106 109 109 3 3 -6 207 12 3 11 -0.48
100
9 118 110 109 -9 9 -15 194 12 8 11 -1.31
10 106 109 110 4 4 -12 176 11 3 10 -1.08 90
11 95 108 109 14 14 3 178 11 15 10 0.24
12 93 106 108 15 15 17 181 11 16 11 1.53 80
13 106 Estimate of standard deviation of forecast error: 14.18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
14 106 Periods
15 106
16 106

The moving average method seems to be better because it results in lower MAD value

CR - 10/29/2024 01:39:31 808132813.xlsx - Solution