Problem P 11-20

Highland Automotive wishes to forecast the number
of new cars that will be sold next week. The follow-
ing table summarizes the number of new cars sold
during each of the past 12 weeks:

WEEK NUMBER SOLD (a) Provide a forecast by using a 3-week weighted
1 22 moving average technique with weights 5, 3, and
2 26 1 (5 = most recent).
3 23 (b) Forecast sales by using an exponential smooth-
4 27 ing model with a = 0.45.
5 21 (c) Highland would like to forecast sales by using
6 25 linear trend analysis. What is the linear equation
7 28 that best fits the data?
8 26 (d) Which of the methods analyzed here would you
9 29 use? Explain your answer.
10 29
11 27
12 31

Problem P 11-28

Consider the patient data for Dr. Schalkoff given in
Problem 11-27.
(a) Draw the relationship between the crime rate and
Dr. Schalkoff’s patient load. Is a linear model
between these two variables reasonable?
(b) Apply linear regression to study the relationship
between the crime rate and Dr. Schalkoff’s pa- Year Number of Patients Crime Rate
tient load. 1 30 67.3
(c) If the crime rate increases to 140.2 in year 11, 2 27 70.6
how many patients will Dr. Schalkoff treat? 3 34 82.4
(d) If the crime rate drops to 98.6, what is the patient 4 35 84.7
projection? 5 34 90.1
6 49 98
7 54 110.1
8 48 103.8
9 52 112.3
10 55 125.2

Problem P12-24

Blaine Abrams is the owner of a small company
that produces electric scissors used to cut fabric.
The annual demand is for 75,000 scissors, and
Blaine produces the scissors in batches. On average, Blaine
can produce 1,000 pairs of scissors per day
during the production process. Demand for
scissors has been about 250 pairs of scissors per
day. The cost to set up the production process is
$800, and it costs Blaine $0.90 to carry 1 pair of
scissors for one year. How many scissors should
Blaine produce in each batch?

Problem P12-26

Chandler Manufacturing has a demand for 1,000
pumps each year. The cost of a pump is $50. It
costs Chandler Manufacturing $40 to place an
order, and the carrying cost is 25% of the unit cost.
If pumps are ordered in quantities of 200, Chandler
Manufacturing can get a 3% discount on the cost of
the pumps. Should Chandler Manufacturing order
200 pumps at a time and take the 3% discount?


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Highland Automotive wishes to forecast the number of new cars that will be sold next week Answer