BBRADLEY University Department of Industrial & Manufacturing Engineering & Technology IME 483/583 Production Planning & Control, Fall 2017 Project 1 Due: October 26, 2017 (Any late assignments will not be accepted.) (80 points) World Oil is a worldwide refiner and distributor of fuel products for automobiles, aircraft, truck, and marine operations. Outlets are in the form of service stations and bulk facilities, Keeping more than 1,000 such outlets supplied is a significant operating problem for the company. Maintaining adequate fuel levels at the auto service stations is its major concern because fuel generates the most revenue for the firm and has the greatest demand for customer service (product availability). Being able to forecast usage rates by product at these service stations is one of the key elements of good distribution operations. In particular, the tanker truck dispatchers need an accurate forecast of fuel usage in order to schedule fuel deliveries at service stations to avoid stockouts. Service Station Operation Service stations may carry these or four different grades of fuel including 87, 89, and 92 octane, and diesel fuels. These are stored in underground storage tanks. Due to the variations in the usage rates among the stations and the limited capacities of these tanks, the frequency of resupply may range from two or three times per day to only several times per week. Each tank is dedicated to one type of fuel. Fuel levels are measured periodically by placing a calibrated stick into a storage tank, although some of the more modern stations have electronic metering devices on their tanks. Tanker trucks, typically having four fuel compartments, are used for resupply. A Forecasting Situation Each service station's fuel grade represents a specific forecasting situation. A case in point is one of the lower-volume stations that sells 87 octane fuel. With resupply occurring only a few times per week, forecast of usage rates on a daily basis is adequate. Because usage does depend on the day of the week, forecasting for a particular day of the week may be quite different form any other day of the week. In the table given below, a history of Monday 87 octane fuel usage rates for the last 2+ years is given for one low-volume station. Questions 1. Plot the given data set. Develop a forecasting procedure for this service station. Why did you select your method? 2. How should the periods of promotions, holidays, or other periods be handled in the forecast where fuel usage rates deviate from normal patterns? 3. Forecast next Monday's usage and indicate the probable accuracy of the forecast. Week Usage (Gal.) Two Years ago. 530 570 560 530 510 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 1 2 3 41 42 43 560 610 560 580 610 650 700 760 730 760 730 760 820 780 900 840 770 820 800 760 760 770 790 760 740 720 670 690 470* 670 690 620 650 610 620 Usage (Gal.) Last Years Usage (Gal.) This Year 640 590 610 2 660 640 810** 790** 820** 650 ? 710 700 670 690 730 730 760 790 810 870 890 870 890 880 930 980 900 860 890 880 870 840 860 910 870 860 840 540** 780 750 780 760 710 730 750 750 710 790 860 890 780 810 44 45 46 47 48 49 50 51 52 Holiday. ** Promotional period. 600 630 600 630 640 610 590 610 630 750 720 770 740 750 760 780 800 850