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  • Forcast Cutting Coffee Costs

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    Henna Dhawan
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    The document compares demand forecasts using different values for α in an exponential smoothing technique. When α is changed from 0.1 to 0.3, the forecasts change substantially in periods 3 and 8, with a sharp increase. Mean absolute deviation (MAD) and mean forecast error (MFE) are calculated to evaluate forecast accuracy for α=0.1, with MFE indicating an underforecasting trend as its value is positive.

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    The document compares demand forecasts using different values for α in an exponential smoothing technique. When α is changed from 0.1 to 0.3, the forecasts change substantially in periods 3 and 8, with a sharp increase. Mean absolute deviation (MAD) and mean forecast error (MFE) are calculated to evaluate forecast accuracy for α=0.1, with MFE indicating an underforecasting trend as its value is positive.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    10 views3 pages

    Forcast Cutting Coffee Costs

    Uploaded by

    Henna Dhawan
    The document compares demand forecasts using different values for α in an exponential smoothing technique. When α is changed from 0.1 to 0.3, the forecasts change substantially in periods 3 and 8, with a sharp increase. Mean absolute deviation (MAD) and mean forecast error (MFE) are calculated to evaluate forecast accuracy for α=0.1, with MFE indicating an underforecasting trend as its value is positive.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 3

    Forcasting Techniques

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

    Demand
    30
    60
    52
    59
    52
    58
    38
    40
    47
    39
    34
    64

    Forecast
    =.1

    =.3
    30
    33
    34.9
    37.31
    38.779
    40.7011
    40.43099
    40.387891
    41.0491019
    40.84419171
    40.15977254

    30
    39
    42.9
    47.73
    49.011
    51.7077
    47.59539
    45.31677
    45.82174
    43.77522
    40.84265

    The forcasts change substantially on chnaging the value of from .1 to .3 in periods 3 and 8.
    There is a sharp increase in the demand forcast in these periods.

    Ans a)
    Ans b)
    Period
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10
    11
    12

    Demand Change in Demand


    30
    60
    52
    59
    52
    58
    38
    40
    47
    39
    34
    64

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

    Demand Change in Demand


    30
    60
    52
    59
    52
    58
    38
    40
    47
    39
    34
    64

    =.1
    =.3
    30
    60
    30
    30
    52
    27
    21
    59
    24.5
    11.7
    52
    21.05
    -2.49
    58
    17.955
    -18.837
    38 13.9505 -41.8881
    40 11.54555 -65.8545
    90 8.700105 -97.6109
    39 0.570116 -153.894
    34 -3.27287 -211.762
    64 -7.00016 -285.491

    Ans c)
    Period

    =.1
    30
    60
    52
    59
    52
    58
    35
    40
    47
    39
    34
    64

    30
    33
    34.9
    37.31
    38.779
    40.7011
    40.13099
    40.11789
    40.8061
    40.62549
    39.96294

    =.3
    30
    39
    42.9
    47.73
    49.011
    51.7077
    46.69539
    44.68677
    45.38074
    43.46652
    40.62656

    Q2 a
    Period
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10
    11
    12

    Demand
    30
    60
    52
    59
    52
    58
    38
    40
    47
    39
    34
    64

    =.1

    |Actual-Forcast|

    30
    33
    34.9
    37.31
    38.779
    40.7011
    40.43099
    40.38789
    41.0491
    40.84419
    40.15977

    Actual-Forcast

    30
    19
    24.1
    14.69
    19.221
    2.7011
    0.43099
    6.612109
    2.0491019
    6.84419171
    23.84022746
    149.4887201

    MAD
    MFE

    30
    19
    24.1
    14.69
    19.221
    -2.7011
    -0.43099
    6.612109
    -2.0491019
    -6.84419171
    23.84022746
    125.4379529

    13.58988364
    11.40345026

    MFE doesnot take the absolute difference into consideration.


    Hence it gives a signal of direction
    Also as MFE > 0, it means its underforcasting.

    Ans 2b)
    Period
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10
    11
    12

    Demand
    30
    60
    52
    59
    52
    58
    38
    40
    47
    39
    34
    64

    =.1
    30
    33
    34.9
    37.31
    38.779
    40.7011
    40.43099
    40.38789
    41.0491
    40.84419
    40.15977

    =.5

    error
    30
    45
    48.5
    53.75
    52.875
    55.4375
    46.71875
    43.359375
    45.1796875
    42.08984375
    38.04492188

    =.8
    30
    7
    10.5
    -1.75
    5.125
    -17.4375
    -6.71875
    3.640625
    -6.1796875
    -8.08984375
    25.95507813
    42.04492188

    Error

    30
    30
    54
    -2
    52.4
    6.6
    57.68
    -5.68
    53.136
    4.864
    57.0272 -19.0272
    41.80544 -1.80544
    40.36109 6.638912
    45.67222 -6.67222
    40.33444 -6.33444
    35.26689 28.73311
    35.31672

    =.9

    Error

    30
    30
    57
    -5
    52.5
    6.5
    58.35
    -6.35
    52.635
    5.365
    57.4635 -19.4635
    39.94635 0.05365
    39.99464 7.005365
    46.29946 -7.29946
    39.72995 -5.72995
    34.57299 29.42701
    34.50811

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