Student Name: Le Thi Nhu Quynh

Student ID: IELSIU19250

TIME SERIES & FORECASTING

HOMEWORK 1

Question 1: (60 points)

Design the forecasting process in supply chain, production, marketing,… with a graph and a
detailed explanation.

 Production forecasting process:

Decide what Determine the Collect data

to forecast? time frame for forecasting

Build and test Select the

Show the forecasts the forecasting forecasting model
model

Compare events
with the forecasts

 Detailed explanation:

1. Decide what to forecast:

The product manager or product predictor must first know exactly why he/she is doing
production forecasting and what to forecast?
The answer may be, we are doing forecast to help us in marketing planning, or in plant
capacity planning, etc for the first question. And what to forecast, that is, the volume of
production, the value of sales, the amount of finance required, number of workers
required for the future production and so on. Moreover, product manager/ product
predictor must decide the units of measurement such as volume, value, etc for forecasting.
If we know what we are going to do, then we collect proper data for that purpose, this will
result in more accurate forecasting.
2. Determine the time frame:
The product manager/ product predictor then fixes or determine the time frame for
production forecast. He/she clearly decide what period we make a forecast. It maybe a
week, a month, a quarter, one year or more.

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Student Name: Le Thi Nhu Quynh
Student ID: IELSIU19250

3. Collect the data for forecasting:

After choosing the time frame, he/she must fix the database. It means that he/she will
decide where collect the data for forecasting. Data is taken from internal sources or
external sources. And what types of data will be used? It is whether quantitative data or
qualitative data.
4. Select the forecasting model:
In this step, he/she decide the method or model of forecasting which he/she will use.
There are many methods of forecasting, these are, quantitative method & qualitative
methods. Hence, he/she should classify which methods are suitable for new products and
which applied for existing products. For example, with current products have stable
demand, Simple Moving Average should be used.
5. Build and test the forecasting model:
In fifth step, the product manager/ product predictor uses a part of available data to build
a forecasting model. This model maybe a statistical or mathematical formula. He/she uses
the other part of the data to test the model. That is, they will apply the formula and
observe whether it gives the accurate answer or not. If not, they will make necessary
changes to the formula until get satisfactory results.
6. Show the forecast:
After selecting the model, he/ she will finish it and give the forecast to those who will use
it. He/she must also supply detailed information about, how the forecasts are made, from
where the data was collected, what are the assumptions of the forecasts, …
7. Compare events with the forecasts:
Hence, in this final step, the actual events or performance is compared with the forecasts.
The deviations are corrected, whether possible or the forecast are modified.

Question 2: (40 points)

In the lecture of chapter 1, we defined time series as a sequence of observations taken
sequentially in time.
Below are various examples of dataset, classify them as time series data or not, and why?
1. The price of an airline ticket during different seasons
2. Name and addresses of users
3. Number of steps walked every day for the past year
4. Geo-spatial data of all the hiking trails in Yosemite
5. Weekly energy consumption
6. Number of hotel rooms booked in the last 6 months.
7. The total sales in the past 3 years of an insurance company.
8. The number of calls for the last 2 weeks.
 Answer:
- Time series: Datasets no. 1,3,5, 6,7,8.
Because they are collected from a process with an equally spaced periods of time, that is
+ Data no.1 have “different seasons”, so the unit is per seasons.
+ Data no.3 has “every day for the past year”, so the unit is per day.

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Student Name: Le Thi Nhu Quynh
Student ID: IELSIU19250

+ With data no.5 “Weekly”, the unit is per week.

+ With data no.6 “last 6 months”, so the unit is per month.
+ Data no.7 “past 3 years”, so the unit is per year.
And finally, data no.8 “last 2 weeks”, so the unit is per week. And all data above are
dynamic. It means the data changes over time.
- No time series data: Datasets no. 2,4
They are not time series data because:
+ Data no.2, it does not mention about period and time as well. Hence, this is not time
series data.
+ Data no.4 is similar to data no.2, it does not mention about time. So this is not time
series data.