Assignment:
The Italian General's Pizza Parlour is a small restaurant catering to patrons with a taste for European pizza. One of its specialties is Italian Prize pizza. The manager must forecast weekly demand for these special pizzas so that he can order pizza shells weekly. Recently, the demand has been as follows:
|
Week
|
Number of Pizzas Sold
|
|
June 2-8
|
48
|
|
June 9-15
|
62
|
|
June 16-22
|
49
|
|
June 23-29
|
55
|
|
June 30-July 6
|
51
|
|
July 7-13
|
59
|
a) Forecast the demand for pizzas for all weeks from June 23 to July 20. Use a three-month weighted moving average with weights of 0.2, 0.3, and 0.5. Note: Show all calculations. Use the largest weight with the most recent data.
|
Week
|
Number of Pizzas Sold
|
Forecast
|
|
June 2-8
|
48
|
|
|
June 9-15
|
62
|
|
|
June 16-22
|
49
|
|
|
June 23-29
|
55
|
|
|
June 30-July 6
|
51
|
|
|
July 7-13
|
59
|
|
|
July 14-20
|
|
|
b) Forecast the demand using exponential smoothing with alpha = 0.2 for all weeks from June 16 to July 20. Use the sales for the week June 2-8 as the starting forecast for the week June 9-15 as given. Note: Show all calculations.
|
Week
|
Number of Pizzas Sold
|
Forecast
|
|
June 2-8
|
48
|
|
|
June 9-15
|
62
|
48
|
|
June 16-22
|
49
|
|
|
June 23-29
|
55
|
|
|
June 30-July 6
|
51
|
|
|
July 7-13
|
59
|
|
|
July 14-20
|
|
|
c) Which of the methods in parts (a) and (b) produces better forecasts for the weeks 4-6? Answer on the basis of a measure of mean absolute deviation (MAD).
|
Week
|
Number of Pizzas Sold
|
|
|
|
|
|
June 23-29
|
55
|
|
|
|
|
|
June 30-July 6
|
51
|
|
|
|
|
|
July 7-13
|
59
|
|
|
|
|
|
|
|
|
|
|
|
Provide complete and step by step solution for the question and show calculations and use formulas.