King Saud University

IE 312 First Quiz (45 MIN)

Name: ----------------------------------Question (1) The following gives the number of brake parts (in thousands) made at ABC plant during the past five months Month Parts January 32 February 40 March 38 April 45 May 47 1) Forecast the production for June using 3 month moving average. 2) Forecast the production for June. Using 3 month weighted moving average with weights 0.4, 0.5, and 0.6 using 0.6 for the most recent month. 3) Compute the forecast for June using exponential smoothing with forecast for January 32 and =0.3 Number: ---------------------------------

Eng. RAED R. ALBARAKAH

Eng. RAED R. ALBARAKAH

Question (2) The following table depicts the number of switches (in thousands) made at ABC plant during the past four years Year Switch 1 100 2 120 3 118 4 122 1) Forecast the number of switches to be made next year using linear regression. 2) Compute the mean squared error (MSE) when using linear regression.

Eng. RAED R. ALBARAKAH

Question 3 A company has to buy either machine A or machine B for its new production line. The cost of machine A (100,000 SR) is larger than the cost of machine B (60,000 SR), but unit production cost using machine A (4 SR) is smaller than unit production cost with machine B (5 SR).We know that the production volume of the new line is uncertain. It may be 40,000 units with probability equals (0.2), but it can be 20,000 with a probability (0.8). As industrial engineer what is the best decision?

Eng. RAED R. ALBARAKAH