1. One of the products made by the Hutton Company is ball joints for automobiles. A university graduate has been forecasting demand. The results of the past 12 months are shown on the next page. The manager is considering cutbacks and winders if forecasting is any more effective in reducing inventory than simply taking an average figure from the previous 12 weeks.

1. Compare the level of inventory necessary at the 99.0% service level between forecasting and averaging.

Week	Forecast	Actual
1	1200	1200
2	1255	1250
3	1260	1250
4	1300	1290
5	1320	1330
6	1320	1330
7	1300	1215
8	1280	1290
9	1260	1255
10	1240	1240
11	1220	1230
12	1200	1190

2. Compare the level of inventory necessary at the beginning of each week (assuming no additional inventory will be added during the week) to have only one stockout in four years on a weekly basis within a 50-week year.