Midterm Flashcards
Step one of graphing
set one variable to zero then solve for other, repeat opposite
step two of graphing
plot lines according to coordinates found in step one
Rule of Lines
Must be labelled correctly and hash lines to indicate greater or less than
feasible region
the space that lies under the constraint lines that satisfies all constraints
step three of graphing
find points of intersection between constraint lines on the border of the feasible region
step four of graphing
apply the coordinates from step three into the maximizing equation to find profit
step five of graphing
find iso-profit lines with the maximizing equation and profit given. set one variable to zero to solve, vice versa
iso-profit line rule
must be labelled (profit=30000) and must be a dashed line. all iso=profit lines are parallel
solution we want
we want the feasible answer to be greater than the optimal answer. the optimal point we choose must also be feasible
if the optimal point is between grid lines
- multiply one line equation by the first number of the second equation (X+Y=200,1.2X+0.75Y=180 becomes 1.2X+1.2Y=240, 1.2X+0.75Y=180).
- then subtract the second equation from the first.
1.2X+1.2Y=240
-1.2X+0.75Y=180
>0.45Y=60 - Then solve for your variables for the optimal point
Y=133.33
X=66.67 - input the optimal point into the objective function for the optimal profit
final step of graphing
always finalize answer in words. (the optimal solution is to make 66.67 of X and 133.33 of Y for a profit of 000.
calculating forecasting error
Actual-Forecasted= (et)
calculating absolute error in forecasting
|et| (absolute value of the error)
calculating the squared error in forecasting
et^2 (squaring the error)
simple moving error
(sum of actual value for n periods)/n
weighted moving average
sum of (assigned weight x actual value) for n periods
exponential smoothing
alpha(actual value)+(1-alpha)(forecasted value)
BIAS
average error = (sum of all et)/n
MAD
mean absolute value = (sum of |et|)/n
RMSE
root of mean square error= sqrt[(et^2)/n]
seasonal indicies
(total of n seasons/n)/average demand per season
average demand per season
sum of n seasons/n
What is forecasting?
the process of predicting a future event
underlying basis of all business decisions
-production
-inventory
-personnel
-facilities
importance of forecasting
- schedule the right amount of workers to handle expected labour volume by analyzing
-avoid over or under stocking by forecasting consumer demands
-meet customer demands efficiently and minimize production bottlenecks
-maximize revenue by determining optimal pricing
-ensure company has enough liquidity to cover daily operating expenses while also meeting long term financial goals
forecasting time horizons
short-range:
- up to one year, generally less than 3 months
-purchasing, job scheduling, production levels
medium-range
-3 months to 3 years
-sales and production planning, budgeting
long-range
-3+ years
-new product planning, facility location, research and development