Question 1a explain the meaning of forecasting support your

Assignment Help Operation Research

Reference no: EM13348188

QUESTION 1

(a) Explain the meaning of forecasting. Support your answer by means of appropriate examples in the business context

(b) Deliberate the strategic importance of forecasting

Year	Sales
1	450
2	495
3	518
4	563
5	584
6	?

The sales manager had predicted previously the business started, that year 1's sales would be 410 air conditioners.

(i) Using smoothing constants of 0.6 and 0.9, develop a forecast for the sales of

Cool- Man air conditioners for years 2 through 6. (Use F_t = F_t-1 + α ( A_t-1 - F_t-1 )

(ii) Define which smoothing constant gives the most accurate forecast.

QUESTION 2

(a) Describe three basic functions of inventory

(b) Describe understand by the term Economic Order Quantity (EOQ)?

(d) A distributor of electronic components, has a contract with a manufacturer to be supplied with 9600 units per year to a dealer. The distributor estimates that the cost is $50 every time an order is placed while the annual holding cost is estimated to be 50% of the unit price.

The company is negotiating with the manufacturer for the following quantity discounts:

Lot size per order	Price per unit
1 - 499	$ 17.00
500 - 999	$ 16.75
1000+	$ 16.50

(i) Define the economic order quantity?

(ii) Define the optimal order quantity?

(iii) Define the total annual inventory cost?

QUESTION 3

(a) Explain the meaning and importance of operations management. Support your answer by appropriate examples

(b) By referring to an organization of choice, define the Input/Transformation

Process/Output Model used in operations management

Reference no: EM13348188

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