The following inventory pattern has been observed in the Zahm Corporation over 12 months. Month Inventory...

The following inventory pattern has been observed in the Zahm Corporation over 12 months.

Month	Inventory
Apr-16	1,544
May-16	1,913
Jun-16	2,028
Jul-16	1,178
Aug-16	1,554
Sep-16	1,910
Oct-16	1,208
Nov-16	2,467
Dec-16	2,101
Jan-17	1,662
Feb-17	2,432
Mar-17	2,443

Use both three-month and five-month moving-average models to forecast the inventory for the next January. Use mean absolute percentage error (MAPE) to evaluate these two forecasts.

Solutions

Expert Solution

3 months moving averages forecast

MAPE = 22.69 %

5 months moving averages forecast

MAPE = 23.79 %

MAPE of 3 months moving averages is less than MAPE of 5 months moving averages

This forecast using 3 months MA is better

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Happyhols sells packaged holidays and has observed the following pattern of sales over the last 8...

Happyhols sells packaged holidays and has observed the following pattern of sales over the last 8 years in terms of the relationship with average income in the market: 2010 2011 2012 2013 2014 2015 2016 2017 Income ($000) 28 27 29 31 30 33 34 34 Sales (units) 380 430 410 420 450 440 480 500 Is it appropriate to use a lagged relationship in the above situation? Explain your reasoning. Estimate an appropriate relationship. Estimate sales in 2018 stating any relevant assumptions. Estimate the income elasticity of demand for the period as a whole. How much of the variation in sales is...

Below are the processing costs of Darnell Products observed over the last 10 months: Month Units...

Below are the processing costs of Darnell Products observed over the last 10 months: Month Units Produced Processing Cost 1 7,500 $44,000 2 11,000 60,000 3 12,500 54,000 4 5,500 20,000 5 9,000 47,000 6 8,500 52,000 7 4,500 22,000 8 7,000 41,000 9 11,500 52,000 10 6,000 41,000 Use the high low method to determine the variable cost per unit and fixed cost per month. Express your results in the form of a linear equation y = a +...

The Questor Corporation has experienced the following sales pattern over a 10-year period: Complete the table...

The Questor Corporation has experienced the following sales pattern over a 10-year period: Complete the table using a first-order exponential smoothing model with a w=0.9w=0.9 to forecast sales in 2017. Year Sales (YtYt) Exponential Smoothing (YˆtY^t) (000) (w = 0.9) 2007 187 2008 214 187 2009 216 =216,203, or 211 2010 234 = 228,205, or 216 2011 268 = 238, 222, or 232 2012 277 = 287,255, or 264 2013 302 = 263, 276, or 293 2014 302 = 323,...

The following monthly returns were observed on a security over 6 consecutive months: 5%, 2%, 6%,...

The following monthly returns were observed on a security over 6 consecutive months: 5%, 2%, 6%, -4%, 0% and 3%. What is the effective annual difference between the 6month geometric return and the 6-month arithmetic return?

Alpha Corporation has the following information for the month of August: Purchases $ 92,000 Materials inventory,...

Alpha Corporation has the following information for the month of August: Purchases $ 92,000 Materials inventory, August 1 6,000 Materials inventory, August 31 8,000 Direct labor 25,000 Factory overhead 37,000 Work in process, August 1 32,000 Work in process, August 31 23,500 Finished goods inventory, August 1 21,000 Finished goods inventory, August 31 30,000 Sales 252,000 Sales and administrative expenses 79,000 Prepare (a) a schedule of cost of goods manufactured, (b) an income statement for the month ended August 31,

Zoe Corporation has the following information for the month of March: Purchases $ 92,000 Materials inventory,...

Zoe Corporation has the following information for the month of March: Purchases $ 92,000 Materials inventory, March 1 6,000 Materials inventory, March 31 8,000 Direct labor 25,000 Factory overhead 37,000 Work in process, March 1 21,000 Work in process, March 31 23,500 Finished goods inventory, March 1 23,000 Finished goods inventory, March 31 30,000 Sales 257,000 Sales and administrative expenses 79,000 Prepare (a) a schedule of cost of goods manufactured, (b) an income statement for the month ended March 31,...

Zoe Corporation has the following information for the month of March. Purchases $ 92,000 Materials inventory,...

Zoe Corporation has the following information for the month of March. Purchases $ 92,000 Materials inventory, March 1 6,000 Materials inventory, March 31 8,000 Direct labor 25,000 Factory overhead 37,000 Work in process, March 1 21,000 Work in process, March 31 23,500 Finished goods inventory, March 1 23,000 Finished goods inventory, March 31 30,000 Sales 257,000 Sales and administrative expenses 79,000 Prepare (a) a schedule of cost of goods manufactured, (b) an income statement for the month ended March 31,...

johnson Corporation has the following information for the month of March:Purchases $ 105,000Materials inventory, March 1...

johnson Corporation has the following information for the month of March:Purchases $ 105,000Materials inventory, March 1 16,000Materials inventory, March 31 8,000Direct labor 35,000Factory overhead 47,000Work in process, March I 28,000Work in process, March 31 33,500Finished goods inventory, March 1 11,000Finished goods inventory, March 31 30,000Sales 357,000Selling expenses24,000Administrative expenses 29,000Prepare (a) a schedule of cost of goods manufactured, (b) an income statement for the month ended March 31,

As observed in Part I, over twenty percent of Garcia Energy’s inventory is invested in inventory....

As observed in Part I, over twenty percent of Garcia Energy’s inventory is invested in inventory. In order to make this component of its asset base more productive, Garcia Energy is analyzing two potential inventory expansion projects. Option B is more costly and provides larger cash inflows. Project A and Project B are mutually-exclusive projects. Andrew Potts believes that he the impact of this decision will extend out to three years. Garcia Energy’s required return is 10 percent on this...

The following payment pattern is 16% in the month of purchase, 33% in the month following...

The following payment pattern is 16% in the month of purchase, 33% in the month following purchase, and the remainder in the 2nd month after purchase. Purchases for each month are JAN $51,665, FEB $51,441, and March $59,200. What would the firms budgeted payments be in March?

Subjects