Formulas

Question 1

Exponential Smoothing with trend adjustment
Initialization

trend line time series

Answer 1

ao = yo - (1 - alpha / alpha) x bo

Question 2

Exponential Smoothing with trend adjustment
Update level demand

trend line time series

Answer 2

at = alpha x yt + (1-alpha) x (at-1)

Question 3

Exponential smoothing with adjusted trend line
update trend

trend line time series

Answer 3

bt = alpha x (at - at-1) + (1-alpha) x bt-1

Question 4

Exponential Smoothing with trend line adjustment
Forecast

trend line time series

Answer 4

Pt + tau = at + bt x (1-alpha)/alpha + tau x bt

Question 5

Exponential Smoothing
Forecast

level demand trend series

Answer 5

Pt = alpha x yt + (1-alpha) x Pt-1

Question 6

Procedure of Silver Meal Heuristic

Answer 6

1. Open up first Range of Coverage
2. Add set-up costs for first period
3. Add next period = (set up costs + inventory holding costs x period) / # of periods
4. Stop when costs are bigger
5. Determine lot size and open up next Lot period

Question 7

Procedure of Wagner/Within Algorithm

Answer 7

1. Draw graph not forgetting E as last stage
2. Calculate all costs: inventory costs x period
3. Construct Matrix starting with setting up every period
4. Add first set up costs + inventory costs from graph
5. Once a better solution is found use that for adding next column
6. Final inventory in last row