lgmt 444 wk2 Business & Finance homework help

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Principles of Supply Chain Management LGMT 444

Problem Set 1

1. Based on the information shown below, develop forecasts for April to October using:

(a) A 3-period weighted moving average model (w1 = 0.5, w2 = 0.3, and w3 = 0.2).

(b) An exponential smoothing model with α = 0.35. Assume the forecast for March was 950.

Month

Actual Demand

Jan

1050

Feb

975

Mar

1000

Apr

870

May

970

Jun

1220

Jul

1170

Aug

1150

Sep

1235

Oct

1275

2. Based on the information shown below, calculate MAD, MSE and tracking signal.

Week

Actual Demand

Forecast

1

750

770

2

690

730

3

820

710

4

850

790

5

870

840

6

780

850

7

915

890

8

950

920

3. For the information given, rank the customers in terms of customer lifetime value.

Avg. Annual Sales Avg. Profit Margin Expected Lifetime

Customer 1: $3,450 17 % 8 years

Customer 2: $2,000 13 % 6 years

Customer 3: $1,400 32 % 10 years

Use a discount rate of 6 percent and treat the average sales figures as annuities. Should any of these customers be fired?

1

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