Homework 3 (25 points)
For all the problems, to receive full scores, you have to show your complete and accurate work. If you only provide the final answers without showing your computations, you will not be assigned a full score (or you will miss the opportunity of receiving partial credit). All homework is to be turned in on time through D2L.
Problem 1: Little’s Law (7 points)
Gearbox Express in Mukwonago, WI repairs gearboxes for wind turbines. The company works seven days per week and last week had the following new orders and end of day inventory levels. This company should be assumed to be operating at steady state so Little’s Law can be applied.
Ending On Hand (EOH) Orders
What is the average arrival of orders per day? (2 points)
What is the average ending on hand (inventory level) per day? (2 points)
Using Little’s Law, how many hours on average did an order spend at Gearbox Express last week? (3 points)
Problem 2: Forecasting (10 points)
Given these sales figures over the first 7 months of the year, your boss needs you to test two different forecasting methods (parts a and b below) to determine which method is best. For your measure of “best”, recommend to your boss that the company should use the method with the lowest mean absolute deviation (MAD). Then use that method to provide your forecast for August in part c.
Units Sold 96 110 103 115 108 101104
Calculate the MAD for the 4 period moving average forecasting technique (4 points).
Calculate the MAD for the 2 period weighted moving average forecasting technique. Use weights of 0.6 and 0.4, with the most recent observation weighted higher (4 points).
How many units would you forecast will be sold in August? (2 points)
Problem 3: Transportation Costing (8 points)
You have a shipment with the following characteristics.
Size: 12 pallets
Weight: 9,000 pounds
Distance: 1500 miles
What is the cost to send this shipment direct via LTL? (2 points)
What is the cost to send this shipment direct via Solo Truckload? (2 points)
What is the cost to send this shipment direct via Rail? (2 points)
What is the cost to send this shipment direct via Airfreight? (2 points)