Fontcastinc Moors r CHAPTERS # eee oS oe | ee Forecast] Cumulative Tracking Error Pee demand ASE Error error MAD Signal a a 7 7 70 10) 5 2 60 733 i iB . 16 _ 8 0 100 48 t ao al % o 30 Ss 4a ht a ae e 2 58 16 “10 ' Te aa 2 x n 3h a7 tt s B a s ‘ MAD is important because itean be usedto Pep increase forecast 40 DISCUSSION QUESTIONS 2 ing sccura 5.9, If y seasonal index eqeals It hat season i just an averoce St pgontes as develo ny fresig sem uu T sn ere ee a 1a ce tends to be four IS se dia boo spermge Ifthe index greater than [that season fonds 10 fe F paemiveieseofibefoeet higher than average . | sete items orate tat 6 frecastol. 5.10, 1 the smooting constant equals 0, then > adie ie brizon fe forse eenebAeBe A 2 sett forecasting model “This means thatthe forcast ever changes | §, Gahertbe necessary da. TTahe smoothing constant eqns then yada Forcasting ml Fay = Fila A= As - -pis means tat he frenst rab’ ea owe cal vale 1, Make the forecast. {Implement the resol. the prio period. $2 Atine sre forecasting model uses his TEA, A centered moving average (CMA should be usa atte weds aod is presen in data IF anoverll average bused omnes USP «eT ations de to wend wil be ioterycted as variations 3s ©, ifernce between causal models and time: ! pea beeen pro account any fire ei wfectore, Thus the seasonal indices wil ot Be Seca” ein account mars torical data w pre- es models is tat cousal mode Se ary bg ayia ey on ny a fa. - Month Shed Sales __Four-Month Moving Average | ‘4. Qualitative models incorporate subjective factors 10 the Tani 0 | gut mar tl when ese me ne Scorn are important, When quantitative “data are difficult t0 ob- ‘Mar. . Pe Me acum 3 Te aur of te mon, were se my BMT Bee soem seechamems BBS: tere sins Mp MET Soom gat 2 the smoothing value, a, is high, more weight Is given ‘Sey 28 23+ 26 + 30¥4 = 98 = 245 ie Momermmetrvne nth momrcegg® GF GIT eigen weviaeneecmoesnamnahenrsens | fey geet mye ne Be 2 pou of pi echniqu involves analyzing the pecacdons Dee. fa @0+ 28 + 18 + 16vd = 94 = 2F Sonepat song te a aye s886. This process may be Tepeated several mes. te fescast vreveloped. The group of The MAD © 178 * . ea Ebi dpe ‘See solution to 513 foreskeubaions. eat i cia for determining te ace) ofa by taking the average of the absolute deviations Scanned with CamScannerom soem an ne + pratons given in he table be MM oe bain gg —e z Fy | H i li Hi 27 p =~ O73 i of ae . hea 3s ; os » 5.00 14g $ 5 167 5.00 251 - 8 O75 oss Pod oe Ra az 3 1.00 8 a 4.00 35 S fa ae ate 03 w 1S 333 275 4 uy ute K Sines BB aay des Ba 224 (0 niaton esa sees bic NAD Gear sighed moving serps <9 3) me : MAD (tend line) = 1.39 309.060 “88 ey 2, ; 242 = 875 so a3) Te rend line is best beeats the MAD is toweat The ican abst 34 5.859 = 6 304 Weighted Moving Absolute yer___Demand Average Deviation ~ ean. sm, Eee a 4,000. 1 , 5.000 1.000 2 6,000 4700 1,300 3 4.000 5,099 1,030 4 5,000 4500 4763 zr 5 10,000, 5,000 4834 5.166 - é 8,000 7.250 6334 1616 ? 7,000 7.750 * 6369 a 8 9,000 8,000 8.908, 2002 3 12,000 8.250 7536 ‘464 0 14,000, 10,000 ~ 8875. 5125 " 15,000, 12,250 10,412 4583 Total: aoe . Mean: 2.437 +: . This the 3-year Weighted moving average model appears to be | foo 7 | Sig Year 1 2 ae Je-a $56 Forecast 4100 422.0 4439 406.1 495.2 S218 cag = 1S Fereant uinga p06 foe = 410). = a6 410+ (0.9)(450, ae ; eee ae + (0.9K495 ~ 446) RIS See oe a Ba 706 Scam caged Sasg¥# (O9KS63~ S152 + $58 ‘oa tse TSH74 562 OSNGes S882) BLA Scanned with CamScanner¢ tection 52) ° Wags = 58 ety he era ma ne nen ofc tod wetemoving average and a throe:period pe cl rats ve en Oe sing te mean average “ we? us ee 10 ime is thar (it 3s pe tai 1 te ter Lom oy 230 Se 8 Bo 7M Hy fm on ter " car B17 | x mn veges 22. MAD for weighed ea oving average forces fr February is 13.6667. Ba Mou fs fe Fay 13167 ae ped serge freasig nati ed rE Ti acca en BeHAD fr be mv st MA te wii a NEE srt 2 yma the mong aap FERS se cnt for February sO 1 rere many be firs csr, ican 2 say ay underlying causal variables such as adveris- itt ‘ see Sum of Absolute my Mt Forecast Forecast “ties @ frror ASE rors Map Track Signal ied 700 = = = ae 1700 44.00 400 400 1 ere 1720 45.20 520 2.60 2 8 804 +1016 06 3.39 3 tet 1903 19.13 119 280 33 jr. tees $630 oz 2.80 Bt 1 2 1336 yeot 1526 28 305 eae eet a3 1637 234 347 seuS 349 +08 1988 249 an hes 1919 1475 2084 230 su 2508 250 296 420 Scanned with CamScanner sec| wa jee ii et ag st its romh oe a = Time ‘pecily Centered EEO Us OM for Wink, we ee fe Seek aed mutipheive decorator, Th ing Average and we have the hitbnems, re*ull™ 2. Qeattet Pindea = OHRDS.Qranter 2 m6 ‘Quarter 3 inex = 0.9712, Quarter anton 150) The trenslline is ¥ = 237.7478 + 206588 c Guanes 1: ¥ = 237.7478 + 3.605417) ~ 3000062 } Quaree 2 ¥5 0 Tx7 7478 | NUBHA) TOV TIED ‘Quarter 3: Y= 237.7478 + 3.665807 = 307.3978 Quarter 4: Y= 257.7478 + 3.6858 26 = 341.0658 4. Quarter 1: 300.066210 8825) = 264.7898 " Quarter 2: 303.7320.9816) = 298 ise ‘Quaner % 107.3978(0.9712) = 298 5336 * (Qumter 4: 311 0636(1.1569) = 359.8719 S31. Lening ‘ 1 = time period (1, 2,3, +++ 16) Ql = Lifter 1,0 otherwise © Q2 = 1 if quarter 2,0 otherwise 03 = Vif quaner 3,0 otherwise Note: if Q1 = @2 = 03 = 0. then it is quarter - Using computer software we Bet y= 281.6 + 171 ~ 75.101 ~ 48902 ~ 52.105 “The forecasts forthe next 4 quarters af Pe nen 6 2 AMID) — 15.11) — 48.900) ~ 52-10) = 268-7 pa 2816 + 3418) — 75.10) — A8.HK1) ~ 52.100) = 2992 Fa 2816 + 2219) — 75.710) — $8.90) — 52.10) = 299-7 Pn 281.6 + 2.20) ~ 75.10) ~ $8.10) ~ $2.10) 355-4 15:32; - For a smosthing constant of 02, the forecast for year 1T wont: ' $a Exponential smoothing with a = OL 56489, iat reore Forecast Exon Year Rate Forecast = terror ja, 00 650 = + 72 7a o BBs eso+01 Go-s-655 - 30 2 7 72 02, Mr te 55 — 0.168565) = 658" 10 3 (62 71s 086: Bon ear o.ess—ssa-=657 . 0 s 35 6968 1.868 fe od G87 + 0.1017-65= 663 50 553 eer 1378 ‘ | ty 18 663+ 0.1713 ~ 6639-668 "60 6 55 6400 0.900 be 668+ 0.1072.8- 668 = 74 7 67 6220 0.880 te. 74 6316 1.008 ss saa 3 | 68 6533 (0.267 nti probem the iil Forecast (forthe Fist period) was 10 61 6.585 0.486 cess te MAD. ther eppeoach is considered valid. MT 6.489 . j Exgenentil smoothing with a = 03 - MAD = 0.722 the forceast for year 11 i 64S, Beast moon wine = = : eens Foner ee mmo so me 8S 66520 Coat os BR es 0B (Rt 0 as os Ba MAD = 3.34 Wnt MAD, nes 03 prociuces a beter forcast han a = 0.1 | ee ‘ ‘ Seem th inal fern forte ist gsi) at ng the MAD. Either approach is considered valid. Fora smouthing constant of O-, _. ' Scanned with CamScannerpens POT ie a lized oF adjusted sles fg . rocomeeie 3 OT by the Prt soja en Fett «= 1.30x$100,000) = $130,009 oss . reece OF ee et quater (0.903(5120.000) = $108,000 i Ug-70xS 140.000) = $98,009 m quater: mo 28 2 aan tenon eat AN Hye = (lelONSEE.000) = $176.00 2 gst gaat - var 3 we _ i Be im a edmand 91 Sean 92? dn ea a . er $ Hogs ge es Toh e ofall values) 7500204. - year 118 6256, ‘oferall average _ (sum fo a sings ce demand 3 ae pepe oe a sess inde Sl average domand a oie d ; i new annual demand 5 sae Oe Year} demand = 2 gas 0s “wo ioe 12 ee ns (a oe wl te : ; _ oe mo-asT . peste main const 108. leferrton 5 = 7 Sanson y caverge Year season ec mre2, . Peerzemand) Demand index 7s 0 =a Fe Ea 0 1.30 3 = Seo a i = ies ob ia 0 285 2925 250 17 SOLUTIONS TO INTERNET HOMEWORK PROBLENS cl the ora ogatinis ¥ = 1582.61 + 61237K. i 5.39. With a = 0.4, forecast for 2004 = 10,339 and MAD* Y= 15261 + 61237119) = 132176 mee oe 837. With a = 0.6, forecast for 2004 = 10,698 and MAD = 2.61 + 61237120) = 138300 i = oat Ye 158261 + 6123721) = 1 iin est Gee ontaceon Dr -82" a 44424 441 (ime). For 2004 (time = 12) the forecastis GDP = 6127 less 650347, 441.402) = 114395. ‘ remit 093, hoes fo 2008 pei tend Tne found using, Excel is: Patiems © a n : 28m). Note these coefficients are for Windows, dhe test smecthin i a 4 eke histo ating constant is 2 ys fine © 11,12, and 13) the foreetse for te the tad equation is 7 alien teers = 1150+ Onsx Paicnts = 29.73 + 3.28(11) = 65.8 | £1 190+ bans = aim Patines = 29.73 + 3.28(12) — 69.1 | : Y= L930 FOoMStiN) = 1327 Patents = 2073 + 3.24(13) = 724 ais i ary 2007 woul be 1286, I ceeficient of ektermination is 0.85, #008 | nd equation is 00003. 5 : s matlis000ig. = MSE wth eis Scanned with CamScanner