Analysis and Forecasting Techniques Paper 6

1

Oakhurst manufactures goods the month before they are sold and uses a 3-month moving average to predict sales. Sales for the first 4 months of the year are shown below.
January 42,000 units
February 39,000 units
March 43,000 units
April 50,000 units
In May, how many units would Oakhurst expect to manufacture for June sales?






2

Knollwood Industries uses exponential smoothing to forecast collections of outstanding accounts receivable. The company’s credit sales are relatively steady with little seasonal fluctuation, and the use of exponential smoothing has proven to be 90% accurate. Collections last month were forecasted to be $525,000, but actual collections were $485,000. Using a smoothing constant of 0.25, Knollwood’s collections for next month are projected to be






3

Calculate the exponential smoothing forecast for Week 3 using a smoothing constant of 0.2. The forecast for Week 1 is 32. The time-series data follows.
Week.. Sales
1 .........32
2 .........36






4

The expected value of perfect information is the






5

The probabilities shown in the table below represent the estimate of sales for a new product.
Sales (Units).. Probability
0-200 .................15%
201-400............. 45%
401-600 .............25%
601-800............. 15%
What is the probability of selling between 201 and 600 units of the product?






6

In decision making under conditions of uncertainty, expected value refers to the






7

The expected monetary value of an event






8

Expected value in decision analysis is






9

The expected monetary value of an act is the






10

The expected value of perfect information is the






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