Midterm OM

MIDTERM EXAMINATION
Name: Cù Huy Hoàng Vũ

Student ID: 31211023475
Class: ADC05
1. Revenue of Super K Beverage Company are listed below
*X = 47 + 800 = 847
Month 2017 2018 2019 2020 2021 2022

1 600 620 630 847 600 620
2 850 847 865 865 850 860
3 630 750 847 630 630 750
4 430 850 425 535 430 847
5 200 240 320 250 200 240
6 850 847 895 895 847 870
7 630 680 670 630 630 680
8 847 850 847 445 530 850
9 300 220 230 230 300 220
10 750 860 865 847 750 860
11 630 850 650 630 847 850
12 847 850 725 735 830 847
*The price for each package: (47*1.000 + 500.000 VND) / package = 547.000
VNĐ/package
a. What is the forecasting revenue for year 2023, using a Two-period moving average?
Year At Ft (At – Ft)2
2017 7564
2018 8464
2019 7969 8,014 $2,025
2020 7539 8,217 $459,006
2021 7444 7,754 $96,100
2022 8494 7,492 $1,005,006
2023 7,969
→ Revenue for year 2023: 7969 x 547.000 = 4.359.043.000 VNĐ

→ MSE = 1,562,138/4 = 390 535
b. What is the forecasting revenue for year 2023, using a Three-period moving average?
2017 7564
2018 8464
2019 7969
2020 7539 7,999 $211,600
2021 7444 7,991 $299,209
2022 8494 7,651 $710,649
2023 7,826
→ Revenue for year 2023: 7826 x 547.000 = 4.280.639.667 VNĐ

→ MSE = 1,221,458/3 = 40 819
c. What is the forecasting revenue for year 2023, using a Exponential Smoothing with
Trend? (α = 0.4, β = 0.6, F1 = 7.400, T1 = 0)
• Forecast (Ft) = Ft-1+α(At-1-Ft-1)
• Trend (Tt) = β(Ft−Ft-1)+(1−β)Tt-1
• Given: α = 0.4, β = 0.6, F1 = 7.400, T1 = 0
Year At Ft Tt FITt
1 2017 7564 7400 0 7400
2 2018 8464 7,466 39 7,505
3 2019 7969 7,865 255 8,120
4 2020 7539 7,907 127 8,034
5 2021 7444 7,760 -37 7,722
6 2022 8494 7,633 -91 7,543
7 2023 7,978 170 8,148

2017 7564 7400 $0
2018 8464 7,466 $1,549
2019 7969 7,865 $65,209
2020 7539 7,907 $16,158
2021 7444 7,760 $1,397
2022 8494 7,633 $8,223
2023 7,978
→ Revenue for year 2023: 8,148 x 547.000 = 4.456.956.000 VNĐ

→ MSE = 92,536/6 = 15 423
d. Determine the best forecasting revenue based on MSE (Mean squared error)
Method MSE
Two-period moving average 390 535
Three-period moving average 40 819
Exponential Smoothing with Trend 15 423
→ Based on the MSE values provided, the Exponential Smoothing with Trend method
has the lowest MSE (15 423), which indicates that it provides the best forecasting
revenue among the three methods.
e. The manufacturing cost for each package are listed below:
Determine the break-even point. According to the best forecasting revenue in 2022 from
question D, what should this firm do? Why?
Expenses Cost
Warehouse 30,000,000 vnđ/month
Materials 50,000 vnđ/1 package
Labor expenses 35,500,000 vnđ/month
Tax 20% total revenue
Operating expenses 15% total revenue
Marketing expenses 10% total revenue
Selling expenses 10,000 vnđ/1 package
Managerial expenses 10% total revenue
Other expenses 6% total revenue
2. Super K Beverage Company distributes a soft drink that has a constant annual demand
rate of 15 423 (Y1) packages, daily standard deviation is 10 cases. A package of the soft
drink costs Super K $2.5. Ordering costs are $22 per order, and inventory-holding costs
are charged at 23 percent of the cost per unit. There are 213 (Y2) working days per
year, and the lead time is 4 days.
a. Find the economic order quantity and total annual cost, and compute the reorder point
with safety stock to ensure 95% service level (z= 1.64).
b. Assume that the production rate is 100 cases/day. Find out the optimal quantity of
product.
c. Super K Beverage gets a special offer from their supplier with 10% discount for the
order with the number of products being higher than 700 units, and 20% discount for the
ordering number being larger than 1200 units. Should Super K Beverage consider its
EOQ again?
Y1 = 15 423
Y2 = 260 – 47 = 213
D = annual demand = 15,423 packages
S = ordering cost = $22 per order
H = inventory holding cost = 23% of $2.5 = $0.575 per package
• Economic order quantity: EOQ = √(2DS/H) = 1086 packages
Q = order quantity = 1086
p = cost per package = $2.5
• Total annual cost = DS/Q + QH/2 + Dp = $39 182
d = daily demand = 15,423 / 213 = 72 packages
L = lead time = 4 days
σ = standard deviation of daily demand = 10
• Safety stock (zσL) = z × σ × √(LT)
• Reorder point = (d x L) + z × σ × √(LT) = 320

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MIDTERM EXAMINATION

Name: Cù Huy Hoàng Vũ

Month 2017 2018 2019 2020 2021 2022

→ Revenue for year 2023: 7969 x 547.000 = 4.359.043.000 VNĐ

Year At Ft (At – Ft)2

2020 7539 7,999 $211,600

2021 7444 7,991 $299,209

2022 8494 7,651 $710,649

→ Revenue for year 2023: 7826 x 547.000 = 4.280.639.667 VNĐ

Year At Ft (At – Ft)2

→ Revenue for year 2023: 8,148 x 547.000 = 4.456.956.000 VNĐ

e. The manufacturing cost for each package are listed below:

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