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You are a camera retailer and are deciding how much to stock of a particular digital camera. The camera comes in two colors: silver and

You are a camera retailer and are deciding how much to stock of a particular
digital camera. The camera comes in two colors: silver and red metallic. Demand
in the first 9 weeks for the camera is shown in the following table. You started the
forecast process at the end of week 1, when you used the week 1s demand as the
forecast for Week 2s demand.
Week Demand for silver Demand for red metallic
119032009
221111808
318051999
420101778
522221567
624351799
721131665
823481438
925551589
a. Calculate the simple exponential smoothing forecast for silver cameras
in Week 10 with =0.5. What is MAD?
b. Calculate the simple exponential smoothing forecast for red metallic
cameras in Week 10 with =0.5. What is MAD?
c. How many silver cameras do you need to stock if you want to make
sure that the probability of not meeting the demand in Week 10 is 0.1?
d. How many red metallic cameras do you need to stock if you want to
make sure that the probability of not meeting the demand in Week 10 is
0.1?
e. The only difference between the two types of camera is an inexpensive
outside shell. Hence you can forecast the combined demand (silver
plus red metalic), and stock enough basic cameras, without the colored
outside shell, to ensure that the probability of not meeting the combined
demand is 0.1. How many basic cameras (without the colored outside
shell) do you need to stock? Is this number greater than or less than the
sum of your answers to part c?

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