Assume that you are the production manager for Fast Current Kayaks of Washington State. One of the products that you make and sell is the ?Fast Current? sea touring kayak paddle ). You are responsible for ensuring that there is enough production capacity to meet demands (given the very high markup on the paddles).

a. Given the data shown above, beginning in Quarter 1 of year 2, use a moving average based on four quarters to predict the demand in each quarter.

b. Using the same data, forecast demand using exponential smoothing. You are given an initial forecast for year 1, quarter 1 of 17. When generating your forecasts, assume that the smoothing coefficient is 0.10.

c. Which of the forecasting procedures performed the best? Why? Hint: Plot the demand data to better understand what is going on in the data.

2. Complete Problem 9 ? Production Plan

Year Year 1 Year 2 Year 3 Year 4 Quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Demand 18 19 18 17 19 21 18 19 20 24 28 32 30 31 34 40 Year Year 5 Year 6 Year 7 Year 8 Quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Demand 42 38 59 58 60 61 62 62 64 65 66 68 69 68 67 68 Level Plan Quarter 1 2 3 4 Total Demand 4000 6000 3000 7000 20000 Regular Ending Production Inventory Workers Required Hire Fire Chase Plan Quarter 1 2 3 4 Total Demand 4000 6000 3000 7000 20000 Regular Ending Workers Production Inventory Required Hire Fire