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We chose to take a
combination of incremental and multiplicative pickup, and regression data.
First we created incremental and multiplicative pickup matrices for the demand we realised,
and we estimated demands for D-0 using the average pickups and the multiplicative ratios.
For this we used as inputs the demand values for D-1, D-2, D-3, D-4, D-7 and D-14.
We also conducted a regression of the inputs on the D-0 values. We got a very bad
regression equation when we took all the inputs. This was because D-2, D-3, D-4 and D-7
data were highly correlated.
On filtering the variables, we obtained a better model using D-1 and D-14 data alone.
Regression Analysis: D-0 versus D-1, D-14, D-2, D-3, D-4, D-7
The regression equation is
D-0 = 14.2 + 0.954 D-1 - 0.250 D-14 - 0.004 D-2 + 0.295 D-3 - 0.263 D-4
+ 0.019 D-7
Predictor
Constant
D-1
D-14
D-2
D-3
D-4
D-7
Coef
14.153
0.9543
-0.2504
-0.0040
0.2954
-0.2630
0.0191
S = 7.68181
SE Coef
3.035
0.1165
0.1219
0.2422
0.3169
0.2899
0.1755
R-Sq = 86.3%
T
4.66
8.19
-2.05
-0.02
0.93
-0.91
0.11
P
0.000
0.000
0.043
0.987
0.354
0.367
0.914
VIF
7.172
1.485
19.092
23.993
17.268
4.821
R-Sq(adj) = 85.3%
Analysis of Variance
Source
Regression
Residual Error
Total
Source
D-1
D-14
D-2
D-3
D-4
D-7
DF
1
1
1
1
1
1
DF
6
80
86
SS
29832.9
4720.8
34553.7
MS
4972.2
59.0
F
84.26
P
0.000
Seq SS
29430.1
326.1
12.4
3.0
60.7
0.7
Unusual Observations
Obs
4
11
13
17
D-1
75
59
61
53
D-0
98.000
95.000
86.000
86.000
Fit
82.118
70.232
70.238
67.781
SE Fit
2.310
1.398
1.387
2.394
Residual
15.882
24.768
15.762
18.219
St Resid
2.17R
3.28R
2.09R
2.50R
---------------------------------------------------------------------------------------------------------------
Coef
14.799
0.98816
-0.2285
S = 7.55454
SE Coef
2.903
0.04319
0.1004
T
5.10
22.88
-2.28
R-Sq = 86.2%
P
0.000
0.000
0.025
VIF
1.051
1.051
R-Sq(adj) = 85.9%
Analysis of Variance
Source
Regression
Residual Error
Total
Source
D-1
D-14
DF
1
1
DF
2
85
87
SS
30345
4851
35196
MS
15173
57
F
265.85
P
0.000
Seq SS
30050
296
Unusual Observations
Obs
4
11
12
13
17
D-1
75
59
38
61
53
D-0
98.000
95.000
67.000
86.000
86.000
Fit
82.969
69.215
51.892
69.820
66.257
SE Fit
1.409
0.873
1.671
1.191
1.321
Residual
15.031
25.785
15.108
16.180
19.743
St Resid
2.03R
3.44R
2.05R
2.17R
2.65R
Regression Analysis: D-0 versus D-1, D-14, D-2, D-3, D-4, D-7
The regression equation is
D-0 = 13.7 + 0.995 D-1 - 0.278 D-14 + 0.055 D-2 + 0.063 D-3 - 0.192 D-4 + 0.083 D-7
Predictor
Coef
SE Coef
Constant
13.693
2.562
5.34
0.000
D-1
0.99462
0.09858
10.09
0.000
D-14
D-2
D-3
D-4
D-7
0.2777
0.0548
0.0628
-0.1923
0.0827
0.1049
0.2116
0.2821
0.2483
0.1480
S = 6.43845
-2.65
0.26
0.22
-0.77
0.56
R-Sq = 90.5%
0.010
0.796
0.824
0.441
0.578
VIF
7.255
1.480
20.329
26.758
17.691
4.809
R-Sq(adj) = 89.7%
Analysis of Variance
Source
Regression
Residual Error
DF
6
76
SS
29968.4
3150.5
MS
4994.7
41.5
F
120.49
P
0.000
Total
82
Source
D-1
D-14
D-2
D-3
D-4
D-7
DF
1
1
1
1
1
1
33118.9
Seq SS
29529.0
406.6
0.1
6.7
13.0
12.9
Unusual Observations
Obs
10
14
21
76
D-1
38
43
59
42
D-0
67.000
67.000
84.000
42.000
Fit
51.163
52.606
71.274
54.481
SE Fit
1.826
1.250
1.494
2.020
Residual
15.837
14.394
12.726
-12.481
St Resid
2.57R
2.28R
2.03R
-2.04R
D-2
D-3
D-4
D-7
D-2
0.919
D-3
0.824
0.940
D-4
0.748
0.868
0.954
D-7
0.561
0.687
0.795
0.866
D-14
0.234
0.344
0.433
0.465
0.553
After having gotten demand estimates using the three methods (incremental pickup, multiplicative
index and regression), we tried to merge them into a hybrid model by attaching weights to the
estimates from each model.
We obtained these weights by conducting a regression of the original demand over these three
estimates.
Regression Analysis: Actual versus Incre, Regre, Multi
The regression equation is
Actual = - 8.40 + 0.347 Incre + 0.803 Regre - 0.0257 Multi
Predictor
Constant
Incre
Regre
Coef
-8.396
0.34725
0.80312
SE Coef
3.273
0.07151
0.05031
T
-2.57
4.86
15.96
P
0.012
0.000
0.000
VIF
3.274
1.903
Multi
-0.02574
S = 6.41407
0.02227
R-Sq = 90.2%
-1.16
0.251
2.090
R-Sq(adj) = 89.8%
Analysis of Variance
Source
Regression
Residual Error
Total
Source
Incre
Regre
Multi
DF
1
1
1
DF
3
84
87
SS
31741
3456
35196
MS
10580
41
F
257.17
P
0.000
Seq SS
18679
13007
55
Unusual Observations
Obs
36
53
61
67
Incre
79
37
86
83
Actual
34.000
59.000
95.000
86.000
Fit
50.788
46.617
72.860
72.060
SE Fit
1.858
1.701
1.050
1.752
Residual
-16.788
12.383
22.140
13.940
St Resid
-2.73R
2.00R
3.50R
2.26R
But here we observed that Multiplicative pickup estimate was insignificant. On eliminating this
forecast, we got a better forecast estimate:
Coef
-7.564
0.28851
0.82551
SE Coef
3.199
0.05041
0.04652
R-Sq = 90.0%
T
-2.36
5.72
17.75
P
0.020
0.000
0.000
VIF
1.621
1.621
R-Sq(adj) = 89.8%
Coef
-7.564
0.28851
0.82551
SE Coef
3.199
0.05041
0.04652
S = 6.42674
T
-2.36
5.72
17.75
P
0.020
0.000
0.000
R-Sq = 90.0%
VIF
1.621
1.621
R-Sq(adj) = 89.8%
Analysis of Variance
Source
Regression
Residual Error
Total
Source
Incre
Regre
DF
1
1
DF
2
85
87
SS
31686
3511
35196
MS
15843
41
F
383.57
P
0.000
Seq SS
18679
13007
Unusual Observations
Obs
36
61
67
Incre
79
86
83
Actual
34.000
95.000
86.000
Fit
50.005
73.207
70.372
SE Fit
1.734
1.008
0.971
Residual
-16.005
21.793
15.628
St Resid
-2.59R
3.43R
2.46R
Hence, we propose this model for a more robust demand forecast rather than using each forecast
model individually.
Regression Analysis: D-0 versus D-1, D-14
The regression equation is
D-0 = 13.6 + 1.00 D-1 - 0.278 D-14
Predictor
Coef
Constant
13.647
D-1
1.00450
D-14
-0.27782
S = 6.30794
SE Coef
T
2.459
5.55
0.03689
27.23
0.08691
-3.20
R-Sq = 90.4%
P
VIF
0.000
0.000
1.058
0.002
1.058
R-Sq(adj) = 90.1%