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Period (t) 1 2 3 4 5 6 7 8 9
Actual Demand 11155 4593 2866 3095 7487 7580 3221 1947 2104
Forecast, alpha factor of 0.5 6000 8578 6585 4726 3910 5699 6639 4930 3439
Step 1: Use the exponential smoothing formula to calculate the forecast for w
of 0.5.
Exponential smoothing formula: = ( α * the previous week demand) + ( (1 - α) * the p
C5 = (0.5*B4)+((1-0.5)*B5)
Step 2: Find the mean error, this is the difference between the actual demand
forecasted
Mean error: = Actual Demand - Forecasted Demand
C6 = C4-C5
Step 3: Find the mean absolute deviation, this is the absolute difference betw
the demand forecasted. Therefore all deviations are positive.
Mean Absolute Deviation = ABS (Mean Error)
C7 = ABS(C6)
Step 5: Copy the formulas across to find the forecast, ME, MAD, MAPE until week 52.
7184 2968 1845 1994 5190 1845 2222 2400 8723 4489 2800 3026 5855
2771 4978 3973 2909 2451 3821 2833 2527 2464 5593 5041 3921 3473
4413 -2010 -2128 -915 2739 -1976 -611 -127 6259 -1104 -2241 -895 2382
4413 2010 2128 915 2739 1976 611 127 6259 1104 2241 895 2382
61% 68% 115% 46% 53% 107% 27% 5% 72% 25% 80% 30% 41%
Correct 0.8675
ctual Demand (format as a percentage to 1 decimal place)
13118 5400 3370 3640 14710 6057 3778 2041 7671 6317
4664 8891 7146 5258 4449 9579 7818 5798 3920 5795
8454 -3491 -3776 -1618 10261 -3522 -4040 -3757 3751 522
8454 3491 3776 1618 10261 3522 4040 3757 3751 522
2577 278
5611 4094
-3034 -3816
3034 3816
118% 1373%
Exponential Smoothing and 3 Month Moving Average Exercise
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA AB AC AD AE AF AG AH AI AJ AK AL AM AN AO AP AQ AR AS AT AU AV AW AX AY AZ BA
1 Exponential Smoothing
2
3 Period (t) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
4 Actual Demand 11155 4593 2866 3095 7487 7580 3221 1947 2104 7184 2968 1845 1994 5190 1845 2222 2400 8723 4489 2800 3026 5855 13118 5400 3370 3640 14710 6057 3778 2041 7671 6317 3941 4257 8238 14917 6142 3832 4140 13588 5595 3491 3770 9121 11745 4836 3017 3260 10033 4130 2577 278
5 Forecast 6000 7547 6660 5522 4794 5602 6195 5303 4296 3639 4702 4182 3481 3035 3681 3130 2858 2721 4521 4512 3998 3706 4351 6981 6507 5566 4988 7905 7350 6279 5007 5806 5960 5354 5025 5989 8667 7910 6686 5922 8222 7434 6251 5507 6591 8137 7147 5908 5114 6589 5852 4869
6 ME - -2954 -3794 -2427 2693 1978 -2974 -3356 -2192 3545 -1734 -2337 -1487 2155 -1836 -908 -458 6002 -32 -1712 -972 2149 8767 -1581 -3137 -1926 9722 -1848 -3572 -4238 2664 511 -2019 -1097 3213 8928 -2525 -4078 -2546 7666 -2627 -3943 -2481 3614 5154 -3301 -4130 -2648 4919 -2459 -3275 -4591
7 MAD - 2954 3794 2427 2693 1978 2974 3356 2192 3545 1734 2337 1487 2155 1836 908 458 6002 32 1712 972 2149 8767 1581 3137 1926 9722 1848 3572 4238 2664 511 2019 1097 3213 8928 2525 4078 2546 7666 2627 3943 2481 3614 5154 3301 4130 2648 4919 2459 3275 4591
8 MAPE - 64% 132% 78% 36% 26% 92% 172% 104% 49% 58% 127% 75% 42% 100% 41% 19% 69% 1% 61% 32% 37% 67% 29% 93% 53% 66% 31% 95% 208% 35% 8% 51% 26% 39% 60% 41% 106% 62% 56% 47% 113% 66% 40% 44% 68% 137% 81% 49% 60% 127% 1652%
9 Alpha Factor 0.3
10 -13516 160876 5023%
11 EXERCISE 2: Change the alpha factor to values between 0 and 1. Try to find the best alpha factor.
12
13
16000
14
15 14000
16
12000
Demand
17
18
10000
19
20
21 8000
22
23
24 6000
25
26 4000
27
28
29 2000
30
31
32 0
33 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
34
35 Week
36 Actual Demand Forecast Linear (Forecast)
37
38
Exercise 2
Reflection:
Question 1a) Is exponential smoothing a good technique for using in the aerial simulation game?
Question 1b) Why? More react to recent changes rather than all past observation.
Period (t) 1 2 3 4 5 6 7 8
Actual Demand 21709 20235 14101 12014 15626 20949 27777 19807
EXERCISE 4: Change the alpha factor to values between 0 and 1. Try to find the best alpha fa
35000
30000
25000
Demand
20000
15000
10000
5000
0
1 2 3 4 5 6 7 8 9 10 11 12
Month
10 11 12 13
3 Month Moving Average
Period (t) 1 2 3 4 5 6 7 8 9 10
Actual History 11155 4593 2866 3095 7487 7580 3221 1947 2104 7184
3 month moving average - - - 6204.7 3518 4483 6054 6096 4249 2424
182818 5697%
Step 3: Find the mean absolute deviation, this is the absolute difference between
demand and the demand forecasted. Therefore all deviations are positive.
Mean Absolute Deviation = ABS (Mean Error)
E7 = ABS(E6)
Step 5: Copy the formulas across to find the forecast, ME, MAD, MAPE until week 52.
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
2968 1845 1994 5190 1845 2222 2400 8723 4489 2800 3026 5855 13118 5400 3370
3745 4085 3999 2269 3010 3010 3086 2156 4448 5204 5337 3438 3894 7333 8124
-777 -2240 -2005 2921 -1165 -788 -686 6567 41 -2404 -2311 2417 9224 -1933 -4754
777 2240 2005 2921 1165 787.7 685.7 6567 40.67 2404 2311 2417 9224 1933 4754
26% 121% 101% 56% 63% 35% 29% 75% 1% 86% 76% 41% 70% 36% 141%
3640 14710 6057 3778 2041 7671 6317 3941 4257 8238 14917 6142 3832 4140 13588
7296 4137 7240 8136 8182 3959 4497 5343 5976 4838 5479 9137 9766 8297 4705
-3656 10573 -1183 -4358 -6141 3712 1820 -1402 -1719 3400 9438 -2995 -5934 -4157 8883
3656 10573 1183 4358 6141 3712 1820 1402 1719 3400 9438 2995 5934 4157 8883
100% 72% 20% 115% 301% 48% 29% 36% 40% 41% 63% 49% 155% 100% 65%
41 42 43 44 45 46 47 48 49 50 51 52
5595 3491 3770 9121 11745 4836 3017 3260 10033 4130 2577 278
7187 7774 7558 4285 5461 8212 8567 6533 3704 5437 5808 5580
-1592 -4283 -3788 4836 6284 -3376 -5550 -3273 6329 -1307 -3231 -5302
1592 4283 3788 4836 6284 3376 5550 3273 6329 1307 3231 5302
28% 123% 100% 53% 54% 70% 184% 100% 63% 32% 125% 1907%
Aerials demand data: