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Exercise Set 1

This document contains 3 questions regarding forecasting demand and production quantities from time-series data. Question 1 involves forecasting demand for year 13 using trend line extrapolation and regression. Question 2 involves using a linear regression model to forecast next year's production quantity. Question 3 involves fitting a trigonometric function to seasonal demand data and forecasting demands for the next 9 months.

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elifatlgan25
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31 views

Exercise Set 1

This document contains 3 questions regarding forecasting demand and production quantities from time-series data. Question 1 involves forecasting demand for year 13 using trend line extrapolation and regression. Question 2 involves using a linear regression model to forecast next year's production quantity. Question 3 involves fitting a trigonometric function to seasonal demand data and forecasting demands for the next 9 months.

Uploaded by

elifatlgan25
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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IE 312 Facilities Design and Planning Exercise Set # 1

Question # 1

The manager of a warehouse distribution center would like to determine the


demand for items in the center in order to decide on the size of a new layout.
The demand is shown below.
Year Demand (103 units)
1 50.7
2 55.4
3 59.6
4 61.0
5 58.0
6 60.5
7 66.0
8 70.5
9 77.8
10 87.6
11 94.8
12 100.7

a. Draw a trend line by eye for these data.

b. Use a simple regression model to forecast the demand for year 13.
c. Calculate the 95% prediction interval around the forecast.
d. Calculate the correlation coefficient.

1
IE 312 Facilities Design and Planning Exercise Set # 1

Question # 2

The forecast model for production quantities of an item can be expressed by the
following formula where y = production quantity, x = time period in years and
α0 , α1 = constants. The production quantities for ten years are shown below.

x
y=
α0 x − α1

Year Production Quantity (106 units)


1 6.0
2 10.0
3 13.5
4 16.5
5 19.0
6 21.3
7 23.4
8 25.4
9 27.2
10 29.0

a. Determine the production quantity for next year.


b. Determine the coefficient of determination.

2
IE 312 Facilities Design and Planning Exercise Set # 1

Question # 3

The seasonal demands for a product are shown in the table below.

Year Month Demand (units)


1 Jan. 100
Feb. 120
Mar. 140
Apr. 160
May 155
June 150
July 145
Aug. 140
Sept. 135
Oct. 145
Nov. 160
Dec. 200
2 Jan. 210
Feb. 230
Mar. 250

a. Plot the points and draw a trend line by eye.


b. Use a trigonometric function and fit the data by the least-squares method.
c. Determine the coefficient of determination.

d. What are the forecasted demand for the following 9 months?

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