The effectiveness of harlen forecasting model

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Reference no: EM132264508

The OM Pizza Parlor receives 40 calls per hour for delivery of a pizza. It costs the parlor $10 every time a truck is sent out to deliver the pizzas. It is estimated that each minute a customer waits for a pizza; it costs the parlor 30 cents in lost margin from future business. Assume each call is for one pizza only. Hint: Think of EOQ model.

a) How often should (or TBO) the pizza parlor send a truck for pizza delivery?

b) What would be the answer if a truck could only carry 6 pizzas at a time?

2. Harlen Industries has a simple forecasting model. Take the actual demand for the last four weeks and take the average. This weekly average is used as the weekly forecast for the month this year. This technique was used to forecast the 4 weeks for this year that is shown below along with the actual demand.

Week - Forecast -Actual

1 - 140 - 137

2 - 140 - 133

3 - 140 -150

4 - 140 160

How would you assess the effectiveness of Harlen’s forecasting model? What conclusions can you draw from the assessment? Explain your conclusion.

Reference no: EM132264508

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