Quantitative data – playing with numbers, we have two types time series analysis and casual modeling

techniques

1. Time se…. - plot previous data and using it to forecast the future
Seasonal or cyclic variation can be seen in the graph. Without having this data we cannot d the
budgeting so it’s very important
Moving average – we add previous 3 or 4 actual data and take the average gives us the forecast
for the next period so for the 5th week’s forecasting we take 1st to 4th week’s data. If we have
greater data we take more number
We do it just to check how close is it to our forecasting. If not error so correction is needed
Exponential smoothing – for lot of variation it’s difficult for us to judge
We use a smoothing constant. First period we consider demand and forecast to be the same.
For this we actually take one or two constant variables and see the deviation. If variation less we
take smaller number for constant and vice versa for volatility
We have given equal importance to all the data – problem is that data of recent years or months
are more important as that gives better picture of the market scenario.

Forecast = forecast + trend of previous period

Linear trend equation – read practice.

Forecast accuracy – to reduce error. we can do it ONLY for the known period
Three ways:
MAD – how much it deviates from the center.
MSE –
MAPE – What percentage of w\error we might incur.
(absolute actual – forecast gives only positive values)

2.