Question 1:
A company has actual unit demand for three consecutive years of 113, 143, and 199. The respective forecasts for the same three years are 102, 120, and 199. What is the resulting MAD, MSE, and MAPE that can be computed from this data? Please keep two decimals.
Part a: 5 points
Determine the MAD.
Determine the MSE.
Determine the MAPE. (Give your answer in percent.)
Question 2: Airplane Booking Problem (see Newsvendor Model Lecture)
Please do the Airplane Booking Problem with a high fare of $758 and low fare of $101. The business traveler demand is given by N(mu = 58, sigma = 10).
What is the under-stocking cost Cu?
What is the over-stocking cost Co?
What is the service level or critical fractile? (Please state a probability with 4 decimal places (and not a percentage).
What is the corresponding z-score?
How many seats should we protect for full fare customers? Please round to a whole number.
Question 3: Overbooking
On a given Vancouver-Toronto flight there are 239 seats. Suppose the ticket price is $490 on average and the number of passengers who reserve a seat but do not show up for departure is normally distributed with mean 25 and standard deviation 10. You decide to overbook the flight and estimate that the average loss from a passenger who will have to be 'bumped' (if the number of passengers exceeds the number of seats) is $742.
What is the under-stocking cost Cu?
What is the over-stocking cost Co?
What is the service level or critical fractile? (Please state a probability with 4 decimal places (and not a percentage).
What is the corresponding z-score?
What is the maximum number of reservations that should be accepted? Please round to a whole number.
Question 4: T-shirts Problem (see Newsvendor Model Lecture)
Please do the T-shirts Problem with a sales price of $19 and production cost of $11. Unsold shirts can be sold off at $5. The demand is given by N(mu = 52, sigma = 13).
What is the under-stocking cost Cu?
What is the over-stocking cost Co?
What is the service level or critical fractile? (Please state a probability with 4 decimal places (and not a percentage).
What is the corresponding z-score?