Demand

Tahoe Salt Example from CM4e, Chapter 7
Quarterly Demand
Demand
Dt
8,000
13,000
23,000
34,000
10,000
18,000
23,000
38,000
12,000
13,000
32,000
41,000

Quarterly Demand at Tahoe Salt
45,000
40,000
35,000
30,000

Demand

Year-Qtr
2001-2
2001-3
2001-4
2002-1
2002-2
2002-3
2002-4
2003-1
2003-2
2003-3
2003-4
2004-1

Period
t
1
2
3
4
5
6
7
8
9
10
11
12

25,000
20,000
15,000
10,000
5,000

0
2001-2 2001-3 2001-4 2002-1 2002-2 2002-3 2002-4 2003-1 2003-2 2003-3 2003-4 20

Year, Quarter

at Tahoe Salt 3 2002-4 2003-1 2003-2 2003-3 2003-4 2004-1 uarter Demand .

000 41.000 0 0 Demand 2 Dt Equation for Deseasonalizing Demand where: D = Demand p = periodicity t = period 4 Deseasonalized Demand 6 Period.000 13.000 5.000 23.000 10.000 Demand Period t 25.000 12.000 Deseasonalized Demand for Tahoe Sa Deseasonalized Demand Periodicity p 4 45.125 22.500 22.625 21.000 19.000 32.625 24.000 15.000 13.Deseason Static Forecasting .000 23.000 40.250 21. Trend and Seasonality Deseasonalized Demand for Tahoe Salt 1 2 3 4 5 6 7 8 9 10 11 12 Demand Dt 8.750 22.000 34.000 20.750 20. t 8 10 .000 18.000 35.125 30.000 10.000 38.Level.

Deseason .

99 440.96 8.Deseason ized Demand for Tahoe Salt nalized SUMMARY OUTPUT Regression Statistics Multiple R 0.5 Observations 8 6 Period.07 Coefficients Standard Error t Stat P-value Intercept 18438. t 8 10 12 14 ANOVA df Regression Residual Total SS 1 6 7 ### ### ### MS ### 171813 F 67.9 Standard Error 414.19 0 .81 41.81 63.83 0 X Variable 1 523.92 Adjusted R Square0.96 R Square 0.

Deseason .

31 680.31 .0% Upper 95.0% 17360.31 367.37 19517.37 19517.31 680.Deseason Significance F 0 Lower 95%Upper 95%Lower 95.61 17360.61 367.

Deseason .

31 680.31 367. T F Significance F 67.31 .Level. L Trend.9 Standard Error 414.83 0 8.31 680.07 0 Lower 95% Upper 95% Lower 95.96 MS ### 171813 t Stat P-value 41.0% Upper 95.DeseasonReg Static Forecasting .92 Adjusted R Square 0.61 17360.37 19517.61 367.5 Coefficients Standard Error 18.Regression Analysis REGRESSION SUMMARY OUTPUT Regression Statistics Multiple R 0.0% 17360.439 440.96 R Square 0.5 Observations 8 ANOVA df Regression Residual Total Intercept X Variable 1 1 6 7 SS 11523809.52 1030877.81 524 63.19 0 Initial Level. Trend and Seasonality .98 12554687.37 19517.

000 13.83 1.000 23.47 0.000 0 1 2 3 4 .059 21.000 25.66 0.42 0.614 30.000 12.000 35.15 1.000 34.963 19.68 0.642 45.04 1.155 23.47 0.107 22.6) t S Si 40.000 20.66 0.631 23.000 38.TrendSeason Historical Data Period t Demand Dt 1 2 3 4 5 6 7 8 9 10 11 12 Level = Trend = 8.67 1.000 10.727 D Forecasted Data Year.000 Seasonal Factor Estimate (Eqn 7.203 24.000 Deseasonalized Demand t (Eqn 7.910 17.5) (Eqn 7.535 21.679 24.68 1.000 18.000 15.52 0.000 13.55 1.32 1.4) 18439 524 18.787 44.000 5.000 23.17 1.011 20.487 20.000 0.66 30.583 22.000 32.000 41. Qtr 2004-2 2004-3 2004-4 2005-1 Period t 13 14 15 16 Forecasted Demand F t1 11.000 10.

000 0 Demand Dt Forecast Ft 0 2 4 6 8 10 12 14 .Moving Average Tahoe Salt Forecasts Using Four-Period Moving Average Period Demand Level Dt Lt t 1 8.000 5.750 21.000 22.250 8 38.000 24.250 9 12.000 10.000 4 34.250 22.500 20.000 20.000 6 18.000 15.250 7 23.000 40.750 10 13.500 11 32.500 45.000 20.000 23.500 13 14 15 16 Forecast Ft 19.250 22.000 2 13.000 21.500 5 10.000 3 23.750 12 41.500 24.500 24.000 35.250 21.500 24.MovAvg Adaptive Forecasting .000 21.000 21.000 19.000 21.500 23.750 24.000 25.000 22.000 30.

000 5.000 10.20.000 0 Ft MovAvg 0 2 4 6 8 10 12 14 .000 15.

383 21.000 38.000 10.675 19.490 8.908 20.000 35.490 0.000 40.675 19.Exponential Smoothing Tahoe Salt Forecasts Using Simple Exponential Smoothing Demand Dt Period t 0 1 2 3 4 5 6 7 8 9 10 11 12 Level Lt Forecast Ft 22.000 23.000 5.908 20.000 0 Column B Column D 1 2 3 4 5 6 7 8 9 10 11 12 .544 23.490 23.217 21.473 22.436 20.083 20.383 21.000 12.000 32.083 20.192 20.436 20.000 23.473 22.000 30.544 23.000 41.490 23.000 34.000 alpha 22.000 10.490 23.226 21.595 20.000 15.000 25.595 20.203 20.ExpSmooth Adaptive Forecasting .226 21.000 13.000 20.203 20.000 18.000 13.1 45.217 21.192 20.

20.000 5.000 10.000 15.000 0 ExpSmooth 1 2 3 4 5 6 7 8 9 10 11 12 .

000 22.000 20.113 12 41.542 8 38.736 6 18.917 7 23.654 9 12.401 324 22.963 201 18.000 17.000 35.802 11 32.370 4 34.674 394 20.780 521 22.000 40.207 5 10.1 0.171 304 17.000 20.108 27.818 352 20.000 5.130 406 20.000 23.TrendExpSmooth Forecasts Using Trend-Corrected Exponential Smoothing (Holt's Model) Period t Demand Dt Level Lt 0 18.000 0 Column B Column E 1 2 3 4 5 6 7 8 9 10 11 12 .126 869 23.000 30.846 0.269 747 20.439 1 8.240 27.000 25.000 17.2 45.654 3 23.867 2 13.000 18.000 15.977 28.000 19.371 alpha Beta Trend Tt Forecast Ft 524 305 18.000 22.261 10 13.948 519 23.000 20.856 611 18.000 10.000 21.000 19.635 26.000 25.

61 26642.1 -2612.47 -438.0% 0.0% Upper 95.34 343092657.57 3536.67 Coefficients Standard Error Intercept 12.93 11 1480916666.91 0.01 t Stat 1.83 1.32 113782400.23 Adjusted R Square 0.34 10 1137824009.91 -2612.48 R Square 0.015 6565.02 0. estimate of demand and level at t=0 a.15 Standard Error10666.61 26642.88 Observations 12 ANOVA df Regression Residual Total SS MS 1 343092657.TrendExpSmoothReg REGRESSION SUMMARY OUTPUT Regression Statistics Multiple R 0. estimate of trend at t=0 Significance F 3.01 X Variable 1 1.57 3536.11 .74 F P-value Lower 95% Upper 95%Lower 95.549 892.47 b.11 -438.

47 0.250 21.000 18.000 19.000 5.059 18.000 24.625 20.631 12.TrendSeasonExpSmoothDeseason Forecasts Using Trend and Seasonality Corrected Exponential Smoothing) Deseasonalizing Demand Period t 1 2 3 4 5 6 7 8 9 10 11 12 Deseasonalized Deseasonalized Demand Demand Demand t Dt (Eqn 7.000 40.04 1.000 24.15 1.55 1.000 22.66 Column B Column D 1 2 3 4 5 6 7 8 9 10 11 Si 12 .000 10.67 1.000 25.000 20.000 24.000 30.3) t Level = 18439 Trend = 524 8.68 0.68 1.000 15.679 32.66 0.000 19.000 0 Seasonal Factor Estimate (Eqn 7.47 0.500 22.6) t S 0.203 41.66 0.750 20.125 23.000 20.000 35.32 1.000 22.000 21.625 23.17 1.963 13.727 D D 45.2) (Eqn 7.83 1.5) (Eqn 7.487 23.125 22.535 10.583 23.000 21.42 0.155 13.750 21.107 38.000 22.011 34.52 0.

92 Adjusted R Square 0.31 680.52 11523809.5 Observations 8 ANOVA df Regression Residual Total Intercept X Variable 1 SS MS 1 11523809.19 0 367.TrendSeasonExpSmoothReg Adaptive Forecasting .31 680.31 367.61 8.31 initial estimate of level initial estimate of trend F Significance F 67.37 19517.83 0 17360.439 440.07 0 .61 17360.96 R Square 0.Trend and Seasonality Corrected Exponential Smoothing (Winter's Model) REGRESSION SUMMARY OUTPUT Regression Statistics Multiple R 0.5 CoefficientsStandard Error 18.81 524 63.9 Standard Error 414.0% 41.96 t Stat P-value Lower 95% Upper 95%Lower 95.52 6 1030877.37 19517.0% Upper 95.98 171813 7 12554687.

66 0.209 37.000 20.000 40.47 0.66 0.956 17.000 15.000 25.000 0.000 38.1 18.681 10.340 11.66 0.000 35.1 0.309 24.763 19.281 20.000 13.000 0 Column B Column F 1 2 3 4 5 6 7 8 9 10 11 12 .819 524 514 513 512 513 515 540 526 527 538 514 531 530 0.000 12.000 34.000 23.173 23.17 1.063 41.808 14.000 30.000 41.000 32.914 44.684 30.849 22.000 23.727 9.17 1.832 50.115 22.000 45.TrendSeasonExpSmooth Forecasts Using Trend and Seasonality Corrected Exponential Smoothing) Period t 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 alpha Beta Gamma Demand Dt Level Lt Trend Tt Seasonal Factor St Forecast Ft 8.413 23.68 1.68 1.000 13.835 21.458 24.17 1.66 8.137 33.000 18.660 23.17 1.000 5.000 10.05 0.47 0.68 1.68 1.590 26.47 0.47 0.944 13.936 16.251 19.000 10.439 18.368 28.753 20.

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