Operations Management
Industrial Engineering and Engineering Management Department 0405511: Operations Management
Fall 2021 / 2022 Date: 7th November 2021
Case Study Assignment 2
Note: The assignment can be done with 1-2 students. Submit a single Excel file with your solutions and comments.
Weekly demand at Cold Ice-cream are as follows:
Week Demand
1 80
2 130
3 230
4 340
5 100
6 180
7 230
8 380
9 120
10 130
11 320
12 410
1) [60 Points] Estimate demands for the next four weeks using four-week moving average, simple exponential smoothing with α= 0.2, and linear trend equation methods. Evaluate the
MAD, MSE and MAPE for forecasted data in each case. Which methods do you prefer?
Why?
2) [40 Points] Using the same data, estimate demand using the trend-adjusted exponential smoothing model with α= 0.15 and β=0.25. Evaluate the MAD, MSE and MAPE for forecasted data. Estimate the optimal combination of smoothing constants. Using the optimal smoothing constants, comment which forecasting technique is the most suitable?
Sample Solution