DEMAND FORECASTING

ASSIGNMENT

Submitted By: Vinay Kumar

Submitted To: Prof. P. C. PADHAN

Registration ID: 81768

Logistics & Supply Chain Management (LSCM-1)

Weighted Moving Average
Trend Adjusted Exponential Smoothing

α δ

MAD 227
MSE 87478

Period Actual Level Trend Forecast Error

1 550 550 0
2 300 550 0 550 250
3 667 550 0 550 117
4 667 550 0 550 117
5 578 550 0 550 28
6 594 550 0 550 44
7 460 550 0 550 90
8 756 550 0 550 206
9 1,172 550 0 550 622
10 36 550 0 550 514
11 625 550 0 550 75
12 570 550 0 550 20
13 876 550 0 550 326
14 700 550 0 550 150
15 902 550 0 550 352
16 800 551 0 551 250
17 60 551 0 551 491
18 443 551 0 551 108
19 1,013 551 0 551 462
20 662 551 0 551 111
21 911 551 0 551 360
22 711 551 0 551 160
23 576 551 0 551 25
24 170 551 0 551 381
25 456 551 0 551 95
26 1,129 551 0 551 578
27 636 551 0 551 85
28 690 551 0 551 139
29 120 551 0 551 431
30 551 551 0 551 0
31 0 551
32 0 551
33 0 551
34 0 551
35 0 551
36 0 551
37 0 551
38 0 551
39 0 551
40 0 551
41 0 551
42 0 551
43 0 551
44 0 551
45 0 551
46 0 551
47 0 552
48 0 552
49 0 552
50 0 552
51 0 552
52 0 552
53 0 552
54 0 552
55 0 552
56 0 552
57 0 552
58 0 552
59 0 552
60 0 552

Trend Adjusted Exponential Smoothing

1400

1200

1000

800

600

400

200

0
1 6 11 16 21 26 31 36 41 46 51 56

Period
Actual Forecast
 Ft = The exponentia lly smoothed forecast for period t
Tt = The exponentia lly smoothed trend for period t
FIT t = The forecast including trend for period t
FIT t -1 = The forecast including trend made for the prior period
A t -1 = The actual demand for the prior period
α = Smoothing constant alpha
δ = Smoothing constant delta
FIT t  Ft  Tt
Ft  FIT t 1  αA t 1  FIT t 1 
Tt  Tt 1  δFt 1  FIT t 1 

Trend and Seasonal Effects

Level Trend Season

α δ γ

MAD 218 Initial Seasonal Values

MSE 86129 0.953581 0.958352 0.980061 0.858006

Period Actual Level Trend Season Forecast Error

1 550 641 -2 0.86
2 300 639 -2 0.98 626 326
3 667 637 -2 0.96 610 57
4 667 635 -2 0.95 605 62
5 578 633 -2 0.86 543 35
 6 594 630 -2 0.98 618 24
7 460 628 -2 0.96 602 142
8 756 626 -2 0.95 597 159
9 1,172 624 -2 0.86 536 636
10 36 622 -2 0.98 610 574
11 625 620 -2 0.96 594 31
12 570 618 -2 0.95 589 19
13 876 616 -2 0.86 528 348
14 700 614 -2 0.98 601 99
15 902 612 -2 0.96 586 316
16 800 609 -2 0.95 581 219
17 60 607 -2 0.86 521 461
18 443 605 -2 0.98 593 150
19 1,013 603 -2 0.96 578 435
20 662 601 -2 0.95 573 89
21 911 599 -2 0.86 514 397
22 711 597 -2 0.98 585 126
23 576 595 -2 0.96 570 6
24 170 593 -2 0.95 565 395
25 456 590 -2 0.86 507 51
26 1,129 588 -2 0.98 577 552
27 636 586 -2 0.96 562 74
28 690 584 -2 0.95 557 133
29 120 582 -2 0.86 499 379
30 551 580 -2 0.98 568 17
31 554
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
 55
56
57
58
59
60

This area is used to compute 'initial seasonal values' due to their complexity

Number of full years (set of 4 seasons) 8

Period
Year Average Year 1 2 3 4
1 546 1 1.007326 0.549451 1.221612 1.2216
2 597 2 0.968174 0.994975 0.770519 1.2663
3 600.75 3 1.950895 0.059925 1.040366 0.9488
4 819.5 4 1.068944 0.854179 1.100671 0.9762
5 544.5 5 0.110193 0.81359 1.860422 1.2158
6 592 6 1.538851 1.201014 0.972973 0.2872
7 727.75 7 0.626589 1.551357 0.873926 0.9481
8 335.5 8 0.357675 1.642325 0 0
9 0 9 0 0 0 0
10 0 10 0 0 0 0
11 0 11 0 0 0 0
12 0 12 0 0 0 0
13 0 13 0 0 0 0
14 0 14 0 0 0 0
15 0 15 0 0 0 0

Linear Trend

Intercept Slope
615.36 -0.17

MAD 215
MSE 85652

Period Actual Forecast Error

1 550 615
2 300 615
3 667 615
4 667 615 52
5 578 615 37
 6 594 614 20
7 460 614 154
8 756 614 142
9 1,172 614 558
10 36 614 578
11 625 613 12
12 570 613 43
13 876 613 263
14 700 613 87
15 902 613 289
16 800 613 187
17 60 612 552
18 443 612 169
19 1,013 612 401
20 662 612 50
21 911 612 299
22 711 612 99
23 576 611 35
24 170 611 441
25 456 611 155
26 1,129 611 518
27 636 611 25
28 690 611 79
29 120 610 490
30 551 610 59
31 610
32 610
33 610
34 610
35 609
36 609
37 609
38 609
39 609
40 608
41 608
42 608
43 608
44 608
45 608
46 607
47 607
48 607
49 607
50 607
51 607
52 606
53 606
54 606
55 606
56 606
57 606
58 605
59 605
60 605

Linear Trend
1400

1200

1000

800

600

400

200

0
1 6 11 16 21 26 31 36 41 46 51 56

Period
Actual Forecast

Ft = Forecast for period t

b = Y intercept
m = Slope
t = Time period of interest (t  1 for the first time period)

Ft  mt  b

To find m and b
A = Actual demand
A = Average of all actual demands
t = Time period
t = Average of time periods

m
 t  t A  A 
 t  t
2

b  A  mt