Question 2.
The following table displays a record of sales of a certain product over five weeks:
Week Units Sold
1 6
2 8
3 5
4 9
5 12
Using the naïve forecasting method, generate forecasts for weeks 2-5 and calculate the following three accuracy
metrics for your forecasting model:
a. Mean Forecast Error (MFE): (2 pts)
b. Mean Absolute Error (MAE): (2 pts)
c. Root Mean Squared Error (RMSE): (2 pts)

Question 4.
Ferris-Steed is a manufacturer of high-quality fabrics. Although the company sells a limited line of finished clothing (e.g.,
coats, hats), its primary source of revenue is sales of fabric to high-end tailors, suit manufacturers, and luxury fabric
stores. Ferris-Steed sells its fabric in bolts, typically 100 yards of woven fabric wrapped around cardboard tube, which
can be measured out and cut as needed. Ferris-Steed creates fabric bolts from two sources: a portion of bolts are made
using raw materials that have been manufactured in-house (through a subsidiary company), and a portion of bolts are
made using raw materials that have been purchased through an external provider. Each bolt made from manufactured
raw materials costs $10 to produce and contributes $11 to earnings, while each bolt made from purchased raw
materials costs $20 to produce and contributes only $8 to earnings. The company has budgeted a weekly maximum of
$2,000 for producing bolts. While each bolt made from purchased materials is more expensive, purchased raw materials
have an advantage in that they arrive with most of the processing already complete, and thus take less time to convert
to a finished good. Each bolt made from manufactured raw materials takes approximately 90 minutes to produce,
whereas each bolt made from purchased raw materials requires only 60 minutes to produce. Total time spent each
week manufacturing fabric bolts is limited to 150 hours. The company’s customers are fickle, so management considers
shortages more ‘expensive’ (in terms of lost goodwill) than surpluses. As a result, the company sets minimums around
its supply plan: management has decided that weekly production must at least 75 bolts.
Management is curious to see what weekly production plan an optimization model would recommend. Specifically, they
would like to know how many bolts to produce using manufactured vs. purchased raw materials in order to maximize
weekly profit contribution.
a. Formulate this problem as a linear optimization model, in terms of an objective function and constraint functions.
(5 pts)
b. Graph the problem using the chart provided (see next page) and identify the feasible region. (5 pts)
c. Solve for the optimal number of bolts made from purchased vs. manufactured raw materials the company should
plan to produce each week. Provide the optimal number of bolts produced from each source of raw materials,
and the corresponding profit contribution achieved through this plan. (5 pts)
d. Does this production plan leave slack in any of the constraints incorporated into the model? (4 pts)
e. Below is a table of the objective coefficient ranges for this solution. In a few sentences, provide an interpretation
of these figures. Imagine you are explaining this to someone who is not familiar with this type of analysis.
(3 pts)

DETAILED ASSIGNMENT

20210319021744questions