Contents

Spreadsheet
Add and Mult Models
Methods and Errors
Trend Comparison

Spreadsheets for Error

Computations for
Methods and Errors
Worksheet
Trend Anal
Mult Decomp - Overall Avg
Mult Decomp - CMA
Add Decomp - Overall Avg
Add Decomp - CMA

Note: The steps involved in the 4 decomposition models are annotated on each of the decomposition

Contents

A comparison of the additive and multiplicative models; demonstration of effects of trend, seasonality
Comparison of behavior of Trend Analysis and four Decomposition Models
Demonstration of relationship between quarterly and annual trends

Contents
Computation
Computation
Computation
Computation
Computation

of
of
of
of
of

forecasts
forecasts
forecasts
forecasts
forecasts

and
and
and
and
and

errors
errors
errors
errors
errors

using
using
using
using
using

trend analysis
multiplicative decomposition and basing the seasonal facto
multiplicative decomposition and basing the seasonal facto
additive decomposition and basing the seasonal factors on
additive decomposition and basing the seasonal factors on

the 4 decomposition models are annotated on each of the decomposition spreadsheets.

ty and randomness

ctors on the overall average

tors on 4 quarter centered moving averages
on the overall average
n 4 quarter centered moving averages

Base (Yr1-Q1)
Trend (Quarterly)
Seasonality
Variability

Parameters
100
10
25
20
RandBetw
Multiplicat
een
Additive ive
1
2
102
102
2
11
117
112.75
3
4
131
133.2
4
-13
101
93.6
5
-16
122
114.8
6
0
157
153.75
7
-4
149
142.4
8
19
155
140.25
9
-18
185
189
10
20
216 239.875
11
20
217
234
12
9
193
170.1
13
-4
235
253
14
20
252 278.875
15
20
223
199.2
16
15
208 155.625

Randomly Generated T

Qtr number
Year 1

Year 2

Year 3

Year 4

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4

335234297.xlsx

300

Additive
250

Multiplicative

200
150
100
50
0
1

Quarter

10

11

ted Time Series

10

11

12

13

14

15

16

335234297.xlsx

Base (Yr1-Q1)
Trend (Quarterly)
Seasonality
Variability

Parameters
100
5
10
9

Qtr number
Year 1

Year 2

Year 3

Year 4

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4

Demand
1
99
2
116
3
117
4
113
5
123
6
141
7
123
8
133
9
144
10
157
11
149
12
146
13
168
14
180
15
173
16
167

Method
Trend analysis
Mult Decomp (avg all)
Mult Decomp (CMA )
Add Decomp (avg all)
Add Decomp (CMA)

MAD
6.54
5.30
2.71
5.48
3.06

MSE
58.32
43.13
11.44
42.75
13.41

MAPE
4.67%
3.72%
2.06%
3.87%
2.35%

Randomly Generated Time Ser

200
180
160
140
120
Demand

100
80
60
40
20
0

335234297.xlsx

Quarter

10

11

12

60
40
20
0
1

Quarter

335234297.xlsx

10

11

12

Identified
Trend
4.799
4.747
5.035
4.735
5.049

Time Series

10

11

12

13

14

15

16

335234297.xlsx

10

11

12

13

14

15

16

Could delete expo smooth

all other methods compute the trend
Conditional format may not distinguish well enough

335234297.xlsx

Base (Yr1-Q1)
Trend (Quarterly)
Seasonality
Variability

Parameters
100
0.1
0
0
Qtr number

Year 1

Year 2

Year 3

Year 4

Demand
1
100
2
100.1
3
100.2
4
100.3
5
100.4
6
100.5
7
100.6
8
100.7
9
100.8
10
100.9
11
101
12
101.1
13
101.2
14
101.3
15
101.4
16
101.5

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4

Year

Demand
1
2
3
4

400.6
402.2
403.8
405.4

Annual Trend

1.6

Randoml
102
101.5
101

Demand

100.5
100
99.5
99

Quarterly Trend
Ratio of Annual Trend to Quarterly Trend

0.1
16

335234297.xlsx

domly Generated Time Series

10 11 12 13 14 15 16

Quarter

335234297.xlsx

Forecasting

Data
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Intercept
Slope

Actual quarterly
trend

Trend projection

Forecasts and Error Analysis

Forecast
Error
Absolute
104.57353 -5.573529 5.5735294
109.37206 6.6279412 6.6279412
114.17059 2.8294118 2.8294118
118.96912 -5.969118 5.9691176
123.76765 -0.767647 0.7676471
128.56618 12.433824 12.433824
133.36471 -10.36471 10.364706
138.16324 -5.163235 5.1632353
142.96176 1.0382353 1.0382353
147.76029 9.2397059 9.2397059
152.55882 -3.558824 3.5588235
157.35735 -11.35735 11.357353
162.15588 5.8441176 5.8441176
166.95441 13.045588 13.045588
171.75294 1.2470588 1.2470588
176.55147 -9.551471 9.5514706
Average
6.538235
MAD

Demand (y) Period(x)

99
1
116
2
117
3
113
4
123
5
141
6
123
7
133
8
144
9
157
10
149
11
146
12
168
13
180
14
173
15
167
16
99.775
4.7985294

4.799
Year
Year
Year
Year

1
2
3
4

Annual trend

Annual
Demand
445
520
596
688
80.5

Squared
Abs Pct Err
31.06423
05.63%
43.929604
05.71%
8.0055709
02.42%
35.630365
05.28%
0.589282
00.62%
154.59997
08.82%
107.42713
08.43%
26.658999
03.88%
1.0779325
00.72%
85.372165
05.89%
12.665225
02.39%
128.98947
07.78%
34.153711
03.48%
170.18737
07.25%
1.5551557
00.72%
91.23059
05.72%
58.32105
04.67%
MSE
MAPE

Forecasting

Multiple decomposition using the overall average as the basis for seasonality
Forecasts

Data
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Step 1

Step 3
Ratios
Year 1
Year 2
Year 3
Year 4
Average

Demand (y) Time (x)

99
1
116
2
117
3
113
4
123
5
141
6
123
7
133
8
144
9
157
10
149
11
146
12
168
13
180
14
173
15
167
16

From Step
1
Average
140.563
140.563
140.563
140.563
140.563
140.563
140.563
140.563
140.563
140.563
140.563
140.563
140.563
140.563
140.563
140.563

140.5625 (average)

Season 1
Season 2
Season 3
Season 4
0.704
0.825
0.832
0.804
0.875
1.003
0.875
0.946
1.024
1.117
1.060
1.039
1.195
1.281
1.231
1.188
0.950
1.056
1.000
0.994

From step
Step 2
3
Step 4
Step 6
Step 7
Error Analysis
Ratio
Seasonal Smoothed Unadjusted Adjusted Error
|Error|
Error^2
Abs Pct Err
0.704
0.950
104.237
104.957
99.684
-0.684
0.684
0.468
00.69%
0.825
1.056
109.800
109.705
115.900
0.100
0.100
0.010
00.09%
0.832
1.000
117.052
114.452
114.401
2.599
2.599
6.754
02.22%
0.804
0.994
113.657
119.199
118.510
-5.510
5.510
30.365
04.88%
0.875
0.950
129.507
123.947
117.719
5.281
5.281
27.887
04.29%
1.003
1.056
133.463
128.694
135.961
5.039
5.039
25.387
03.57%
0.875
1.000
123.055
133.441
133.382
-10.382
10.382
107.789
08.44%
0.946
0.994
133.773
138.189
137.390
-4.390
4.390
19.273
03.30%
1.024
0.950
151.618
142.936
135.754
8.246
8.246
67.990
05.73%
1.117
1.056
148.608
147.684
156.023
0.977
0.977
0.954
00.62%
1.060
1.000
149.066
152.431
152.363
-3.363
3.363
11.310
02.26%
1.039
0.994
146.849
157.178
156.270
-10.270
10.270
105.466
07.03%
1.195
0.950
176.888
161.926
153.790
14.210
14.210
201.934
08.46%
1.281
1.056
170.379
166.673
176.085
3.915
3.915
15.329
02.18%
1.231
1.000
173.077
171.420
171.344
1.656
1.656
2.742
00.96%
1.188
0.994
167.971
176.168
175.149
-8.149
8.149
66.410
04.88%
Average
5.298
43.129
03.72%
Step 5
Intercept
100.210
MAD
MSE
MAPE
Slope
4.747

Step
Step
Step
Step
Step
Step
Step
Step

1:
2:
3:
4:
5:
6:
7:
8:

Identify the basis for smoothing - in this case the overall average.
For each period, take the ratio of the actual to the overall average.
Sort the ratios by season and find the average ratio for each season - these are the seasonal factors
Deseasonalize (smooth) the data. Set the deseasonalized value = actual/seasonal factor
Compute the linear regression line for the smoothed data
Use the linear regression line to compute the unadjusted forecasts: F=intercept+slope*t where t is the period
Compute the adjusted forecast by multiplying the unadjusted forecast by the seasonal factor
Use the actual data and the adjusted forecasts to compute the error measures.

Forecasting

Data
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Multiple decomposition using the centered moving averag

Demand (y)Time (x)

99
116
117
113
123
141
123
133
144
157
149
146
168
180
173
167

Step 1
CMA
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

114.250
120.375
124.250
127.500
132.625
137.250
142.500
147.375
152.000
157.875
163.750
169.375

Step 2
Ratio

From step 3
Seasonal
1.009
1.078
1.024
0.977
0.939
0.944
0.990
1.009
1.106
1.078
0.927
0.977
0.969
0.944
1.011
1.009
1.065
1.078
0.980
0.977
0.925
0.944
1.026
1.009
1.063
1.078
0.977
0.944

Step 5

Step 3
Ratios
Year 1
Year 2
Year 3
Year 4
Average

Season 1

Season 2

0.990
1.011
1.026
1.009

1.106
1.065
1.063
1.078

Season 3
1.024
0.927
0.980

Season 4
0.939
0.969
0.925

0.977

0.944

Future Forecasts
Period
Unadjusted Seasonal
Adjusted
17 183.26208 1.008806717 184.87602
18 188.2966 1.077974188 202.97887
19 193.33111 0.977253378 188.93348
20 198.36563 0.944183333 187.29352

Intercept
Slope

Step
Step
Step
Step
Step
Step
Step
Step

1:
2:
3:
4:
5:
6:
7:
8:

red moving average (CMA) as the basis for seasonality

Forecasts
Step 4
Step 6
Step 7
Forecasts and Error Analysis
Smoothed
Unadjusted
Adjusted
Error
|Error|
Error^2
Abs Pct Err
98.136
102.710
103.614
-4.614
4.614
21.292
04.66%
107.609
107.744
116.146
-0.146
0.146
0.021
00.13%
119.723
112.779
110.214
6.786
6.786
46.056
05.80%
119.680
117.813
111.237
1.763
1.763
3.107
01.56%
121.926
122.848
123.930
-0.930
0.930
0.864
00.76%
130.801
127.882
137.854
3.146
3.146
9.898
02.23%
125.863
132.917
129.894
-6.894
6.894
47.520
05.60%
140.862
137.951
130.251
2.749
2.749
7.555
02.07%
142.743
142.986
144.245
-0.245
0.245
0.060
00.17%
145.644
148.020
159.562
-2.562
2.562
6.565
01.63%
152.468
153.055
149.573
-0.573
0.573
0.329
00.38%
154.631
158.089
149.265
-3.265
3.265
10.663
02.24%
166.533
163.124
164.561
3.439
3.439
11.829
02.05%
166.980
168.159
181.271
-1.271
1.271
1.614
00.71%
177.027
173.193
169.253
3.747
3.747
14.036
02.17%
176.872
178.228
168.279
-1.279
1.279
1.637
00.77%
Average
2.713
11.441
2.057%
97.675
MAD
MSE
MAPE
5.035

Identify the basis for smoothing - in this case the 4 period centered moving average
For each period, take the ratio of the actual to the overall average.
Sort the ratios by season and find the average ratio for each season - these are the seasonal factors
Deseasonalize (smooth) the data. Set the deseasonalized value = actual/seasonal factor
Compute the linear regression line for the smoothed data
Use the linear regression line to compute the unadjusted forecasts: F=intercept+slope*t where t
Compute the adjusted forecast by multiplying the unadjusted forecast by the seasonal factor
Use the actual data and the adjusted forecasts to compute the error measures.

e the seasonal factors

onal factor

cept+slope*t where t is the period

easonal factor

Forecasting

Data
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Step 1

Step 3
Differences
Year 1
Year 2
Year 3
Year 4
Average

Additive decomposition using the overall average as th

Demand (y) Time (x)

99
116
117
113
123
141
123
133
144
157
149
146
168
180
173
167

From Step 1
Step 2
Average
Difference
140.5625
-41.5625
140.5625
-24.5625
140.5625
-23.5625
140.5625
-27.5625
140.5625
-17.5625
140.5625
0.4375
140.5625
-17.5625
140.5625
-7.5625
140.5625
3.4375
140.5625
16.4375
140.5625
8.4375
140.5625
5.4375
140.5625
27.4375
140.5625
39.4375
140.5625
32.4375
140.5625
26.4375

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

140.5625 (average)

Season 1
-41.563
-17.563
3.438
27.438
-7.063

Season 2
-24.563
0.438
16.438
39.438
7.938

Step 5

Season 3
-23.563
-17.563
8.438
32.438
-0.063

Future Forecasts
Period
Unadjusted Seasonal
Adjusted
17
180.8125
-7.0625 -1276.98828
18 185.547794
7.9375 1472.78562
19 190.283088
-0.0625 -11.892693
20 195.018382
-0.8125 -158.452436

Season 4
-27.563
-7.563
5.438
26.438
-0.813

overall average as the basis for seasonality

Forecasts
From step 3
Step 4
Step 6
Step 7
Forecasts and Error Analysis
Seasonal
Smoothed Unadjusted
Adjusted Error
|Error|
Error^2
-7.0625
106.0625 105.04779412 97.985294 1.0147059 1.0147059 1.029628
7.9375
108.0625 109.78308824 117.72059 -1.720588 1.7205882 2.9604239
-0.0625
117.0625 114.51838235 114.45588 2.5441176 2.5441176 6.4725346
-0.8125
113.8125 119.25367647 118.44118 -5.441176 5.4411765 29.606401
-7.0625
130.0625 123.98897059 116.92647 6.0735294 6.0735294 36.88776
7.9375
133.0625 128.72426471 136.66176 4.3382353 4.3382353 18.820285
-0.0625
123.0625 133.45955882 133.39706 -10.39706 10.397059 108.09883
-0.8125
133.8125 138.19485294 137.38235 -4.382353 4.3823529 19.205017
-7.0625
151.0625 142.93014706 135.86765 8.1323529 8.1323529 66.135164
7.9375
149.0625 147.66544118 155.60294 1.3970588 1.3970588 1.9517734
-0.0625
149.0625 152.40073529 152.33824 -3.338235 3.3382353 11.143815
-0.8125
146.8125 157.13602941 156.32353 -10.32353 10.323529 106.57526
-7.0625
175.0625 161.87132353 154.80882 13.191176 13.191176 174.00714
7.9375
172.0625 166.60661765 174.54412 5.4558824 5.4558824 29.766652
-0.0625
173.0625 171.34191176 171.27941 1.7205882 1.7205882 2.9604239
-0.8125
167.8125 176.07720588 175.26471 -8.264706 8.2647059 68.305363
Average
5.4834559 42.745404
Intercept
100.3125
MAD
MSE
Slope
4.73529412

Step
Step
Step
Step
Step
Step
Step
Step

1:
2:
3:
4:
5:
6:
7:
8:

Identify the basis for smoothing - in this case the overall average.
For each period, take the difference of the actual to the overall average.
Sort the differences by season and find the average difference for each season - these
Deseasonalize (smooth) the data. Set the deseasonalized value = actual - seasonal fa
Compute the linear regression line for the smoothed data
Use the linear regression line to compute the unadjusted forecasts: F=intercept+slo
Compute the adjusted forecast by adding the seasonal factor to the unadjusted forecas
Use the actual data and the adjusted forecasts to compute the error measures.

rror Analysis
Abs Pct Err
01.02%
01.48%
02.17%
04.82%
04.94%
03.08%
08.45%
03.30%
05.65%
00.89%
02.24%
07.07%
07.85%
03.03%
00.99%
04.95%
03.87%
MAPE

for each season - these are the seasonal factors

= actual - seasonal factor

asts: F=intercept+slope*t where t is the period

the unadjusted forecast
ror measures.

Forecasting

Data
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period
Period

Additive decomposition using the centered moving av

Demand (y)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Step 1
Average

Time (x)

99
116
117
113
123
141
123
133
144
157
149
146
168
180
173
167

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

114.25
120.375
124.25
127.5
132.625
137.25
142.5
147.375
152
157.875
163.75
169.375

Step 2
Difference

2.75
-7.375
-1.25
13.5
-9.625
-4.25
1.5
9.625
-3
-11.875
4.25
10.625

Step 5

Step 3
Differences
Year 1
Year 2
Year 3
Year 4
Average

Season 1

Season 2
-1.25
1.5
4.25
1.5

Season 3

Season 4
2.75
-7.375
-9.625
-4.25
-3
-11.875

13.5
9.625
10.625
11.25 -3.2916667 -7.8333333

Future Forecasts
Period
Unadjusted
Seasonal
Adjusted
17
183.071
1.500
184.571
18
188.120
11.250
199.370
19
193.168
-3.292
189.877
20
198.217
-7.833
190.384

e centered moving average (CMA) as the basis for seasonality

Forecasts
From step
3
Step 4
Step 6
Step 7
Forecasts and Error Analysis
Seasonal Smoothed Unadjusted Adjusted Error
|Error|
Error^2
1.5
97.5 102.29044 103.79044 -4.790441 4.7904412 22.948327
11.25
104.75 107.33922 118.58922 -2.589216 2.5892157 6.7040379
-3.291667 120.29167 112.38799 109.09632 7.9036765 7.9036765 62.468102
-7.833333 120.83333 117.43676 109.60343 3.3965686 3.3965686 11.536678
1.5
121.5 122.48554 123.98554 -0.985539 0.9855392 0.9712875
11.25
129.75 127.53431 138.78431 2.2156863 2.2156863 4.9092657
-3.291667 126.29167 132.58309 129.29142 -6.291422 6.2914216 39.581985
-7.833333 140.83333 137.63186 129.79853 3.2014706 3.2014706 10.249414
1.5
142.5 142.68064 144.18064 -0.180637 0.1806373 0.0326298
11.25
145.75 147.72941 158.97941 -1.979412 1.9794118 3.9180709
-3.291667 152.29167 152.77819 149.48652 -0.48652 0.4865196 0.2367013
-7.833333 153.83333 157.82696 149.99363 -3.993627 3.9936275 15.94906
1.5
166.5 162.87574 164.37574 3.6242647 3.6242647 13.135295
11.25
168.75 167.92451 179.17451 0.8254902 0.8254902 0.6814341
-3.291667 176.29167 172.97328 169.68162 3.3183824 3.3183824 11.011661
-7.833333 174.83333 178.02206 170.18873 -3.188725 3.1887255 10.16797
Average
3.0606924 13.40637
Intercept
97.241667
MAD
MSE
Slope
5.0487745

Step
Step
Step
Step
Step
Step
Step
Step

1:
2:
3:
4:
5:
6:
7:
8:

Identify the basis for smoothing - in this case the centered moving average.
For each period, take the difference of the actual to the overall average.
Sort the differences by season and find the average difference for each season - these a
Deseasonalize (smooth) the data. Set the deseasonalized value = actual - seasonal fac
Compute the linear regression line for the smoothed data
Use the linear regression line to compute the unadjusted forecasts: F=intercept+slop
Compute the adjusted forecast by adding the seasonal factor to the unadjusted forecast
Use the actual data and the adjusted forecasts to compute the error measures.

rror Analysis
Abs Pct Err
04.84%
02.23%
06.76%
03.01%
00.80%
01.57%
05.11%
02.41%
00.13%
01.26%
00.33%
02.74%
02.16%
00.46%
01.92%
01.91%
0.0235115
MAPE

moving average.
erall average.
ence for each season - these are the seasonal factors
alue = actual - seasonal factor

orecasts: F=intercept+slope*t where t is the period

or to the unadjusted forecast
he error measures.