Data MA(3) WMA(3)

Jan 10.00
Feb 12.00
March 15.00 Chart Title
April 16.00 12.33 13.17 2.83
30.00
May 14.00 14.33 15.00 (1.00)
June 17.00 15.00 14.83 2.17 25.00
July 20.00 15.67 15.83 4.17
20.00
Aug 22.00 17.00 18.00 4.00
Sep 25.00 19.67 20.50 4.50 15.00
Oct 21.00 22.33 23.17 (2.17)
10.00
Nov 19.00 22.67 22.50 (3.50)
Dec 24.00 21.67 20.67 3.33 5.00
Jan 26.00 21.33 21.83 4.17
-
18.54 23.00 24.17 Jan Feb Marc April May June July Aug Sep Oc
Data MA(3) WMA(3
 Chart Title

pril May June July Aug Sep Oct Nov Dec Jan
Data MA(3) WMA(3)
Alpha 0.915299748 0.5
Actual Forecasting (0.1) Error MADs(0.1) MSE(0.1) MA%E(0.1) ForecastingMADs(0.5)
(0.5) MSE(0.5) MA%E(0.5)
Jan 180.00 175 5.00 5.00 25 2.78% 175 5 25 2.78%
Feb 168.00 179.58 (11.58) 11.58 134.0153231 6.89% 177.50 9.5 90.25 5.65%
March 159.00 168.98 (9.98) 9.98 99.61102613 6.28% 172.75 13.75 189.0625 8.65%
April 175.00 159.85 15.15 15.15 229.6633074 8.66% 165.88 9.125 83.265625 5.21%
May 190.00 173.72 16.28 16.28 265.1557059 8.57% 170.44 19.5625 382.6914063 10.30%
June 205.00 188.62 16.38 16.38 268.2790188 7.99% 180.22 24.78125 614.1103516 12.09%
July 180.00 203.61 (23.61) 23.61 557.5584443 13.12% 192.61 12.60938 158.9963379 7.01%
Aug 182.00 182.00 0.00 0.00 1.955E-13 0.00% 186.30 4.304688 18.53033447 2.37%
Sep 184.15
Sum 7.65 97.99 1,579.28 0.54 98.63 1,561.91 0.54
Average 12.25 197.41 6.79% 12.33 195.24 6.76%
Tracking Signal 0.08
Chart Title
250.00

200.00

150.00

100.00 Chart T
50.00 250.00

- 200.00
Jan Feb March April May June July Aug
150.00
Actual Forecasting (0.1)

100.00

50.00

-
Jan Feb March April
Actual
 MA%E(0.5)

Chart Title

n Feb March April May June July Aug

Actual Forecasting (0.1)
50.00

-
Jan Feb March April
Actual
n Feb March April May June July Aug
Actual Forecasting (0.1)
Alpha 0.2
Beta 0.4
Initial Forecast 11
Initial Trend
factor 2
45.00
Actual
Months Demand Forecast Trend FIT
40.00
1 12.00 11.00 2.00 13.00
2 17.00 13.20 2.080 15.28
3 20.00 16.04 2.384 18.42 35.00
4 19.00 19.22 2.701 21.92
5 24.00 21.87 2.684 24.56 30.00
6 21.00 24.98 2.854 27.84
7 31.00 27.04 2.535 29.57
25.00
8 28.00 30.37 2.852 33.22
9 36.00 32.75 2.663 35.41
10 36.06 2.923 38.98 20.00

15.00

10.00

5.00

-
1 2 3 4 5

Actual Demand FIT

4 5 6 7 8 9 10

Actual Demand FIT

 NODEL's Example 12 Yc
X Y X*X X*Y y X Forecast Y-Yc
Months Actual Demand 2 1 2.00 0
1 12.00 1.00 12.00 3 3 2.50 0.25
2 17.00 4.00 34.00 2.5 4 2.75 0.0625
3 20.00 9.00 60.00 2 2 2.25 0.0625
4 19.00 16.00 76.00 2 1 2.00 0
5 24.00 25.00 120.00 3.5 7 3.50 0
6 21.00 36.00 126.00 0.375
7 31.00 49.00 217.00
8 28.00 64.00 224.00 Alph 1.75
9 36.00 81.00 324.00 Beta 0.25
10 35.86 Standard Error 0.25 0.25
11 38.41
Coefficient of Correlation0.901388
Alpha 10.36111111 0.901388
Beta 2.55
X Y
Simple
get rid of
A_t BaseLine At/Trend Linear
Irregularity
Regression
Seasonality and
X Smoothing Seasonality De-Seasonalize Trend Forecast
Irregularity
t Year Quarter Material Price MA(4) CMA(4) It*St St At/St Tt Ft
1 1 28.6 T 0.973035846 29.39254512 28.8936197 28.11453 0.485472
2 2 28.1 28.975 0.95529177 29.41509691 29.0554412 27.75642
Year 1
3 3 29.2 29.05 29.0125 1.006462732 1.02149453 28.58556669 29.2172626 29.84527
4 4 30 29.15 29.1 1.030927835 1.038812447 28.87913029 29.379084 30.51936
5 1 28.9 29.35 29.25 0.988034188 0.973035846 29.70085853 29.5409054 28.74436
6 2 28.5 29.725 29.5375 0.964875159 0.95529177 29.83381715 29.7027268 28.37477
Year 2
7 3 30 29.8 29.7625 1.00797984 1.02149453 29.3687329 29.8645482 30.50647
8 4 31.5 29.925 29.8625 1.054834659 1.038812447 30.32308681 30.0263696 31.19177
9 1 29.2 30.425 30.175 0.967688484 0.973035846 30.00917194 30.188191 29.37419
10 2 29 30.425 30.425 0.953163517 0.95529177 30.35721745 30.3500124 28.99312
Year 3
11 3 32 30.525 30.475 1.050041017 1.02149453 31.32664842 30.5118338 31.16767
12 4 31.5 30.6 30.5625 1.030674847 1.038812447 30.32308681 30.6736552 31.86417
13 1 29.6 30.85 30.725 0.963384866 0.973035846 30.42025648 30.8354766 30.00402 Quarter
14 2 29.3 30.975 30.9125 0.947836636 0.95529177 30.67125763 30.9972981 29.61146 1
Year 4
15 3 33 1.02149453 32.30560619 31.1591195 31.82887 2
16 4 32 1.038812447 30.80440564 31.3209409 32.53658 3
17 1 0.973035846 31.4827623 30.63386 4
18 2 0.95529177 31.6445837 30.22981
19 Smoothing means that 3 we have taken out Seasonality and Irregularity in the data 1.02149453 31.8064051 32.49007
20 Yt = St * It * Trend 4 1.038812447 31.9682265 33.20899

SUMMARY OUTPUT

Regression Statistics Beta 0.161821408

Multiple R 0.828011 Alpha 28.73179834
 Seasonality of Material Prices
34

33

32

31

30

29

28

27
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Year 1 Year 2 Year 3 Year 4

St
Year Material Price CMA(4) Forecast
0.973036 0.973036
0.955292 0.955292
1.021495 1.021495
1.038812 1.038812

34
33
32
31
30
29
28
27
26
25
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
R Square 0.685603
Adjusted R Square
0.663146
Standard Error 0.540026
Observations 16

ANOVA
df SS MS F Significance F
Regression 1 8.903297203 8.9033 30.52967 7.47639E-05
Residual 14 4.082787131 0.2916
Total 15 12.98608433

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 28.7318 0.283191815 101.46 1.79E-21 28.1244123 29.33918437 28.1244123 29.3391844
X Variable 1 0.161821 0.029287 5.5254 7.48E-05 0.09900704 0.224635777 0.09900704 0.22463578

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.668578
R Square 0.446996
Adjusted R Square
0.407496
Standard Error 1.149471
Observations 16

ANOVA
df SS MS F Significance F
Regression 1 14.95202941 14.952 11.31629 0.004633381
Residual 14 18.49797059 1.3213
Total 15 33.45

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
32
31
30
29
28
27
26
25
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Year 1 Year 2 Year 3 Year 4 Smoothing

Yt = St * It *
Material Price Trend Forecast
Intercept 28.2425 0.602787685 46.853 8.62E-17 26.949649 29.535351 26.949649 29.535351
X Variable 1 0.209706 0.062338818 3.364 0.004633 0.076002415 0.34340935 0.076002415 0.34340935

PROBABILITY OUTPUT

Percentile Y
3.125 28.1
9.375 28.5
15.625 28.6
21.875 28.9
28.125 29
34.375 29.2
40.625 29.2
46.875 29.3
53.125 29.6
59.375 30
65.625 30
71.875 31.5
78.125 31.5
84.375 32
90.625 32
96.875 33

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.828011
R Square 0.685603
Adjusted R Square
0.663146
Standard Error 0.540026
Observations 16

ANOVA
df SS MS F Significance F
Regression 1 8.903297203 8.9033 30.52967 7.47639E-05
Residual 14 4.082787131 0.2916
Total 15 12.98608433

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 28.7318 0.283191815 101.46 1.79E-21 28.1244123 29.33918437 28.1244123 29.3391844
X Variable 1 0.161821 0.029287 5.5254 7.48E-05 0.09900704 0.224635777 0.09900704 0.22463578
 Xt Yt Xt*Yt Yt*Yt Yc
Data MAD MSE
1 29.39255 29.39255 863.9217 28.89362 0.498925 0.248927
2 29.4151 58.83019 865.2479 29.81185 0.396753 0.157413
3 28.58557 85.7567 817.1346 28.7318 0.146232 0.021384
4 28.87913 115.5165 834.0042 28.7318 0.147332 0.021707
5 29.70086 148.5043 882.141 32.87186 3.170997 10.05522
6 29.83382 179.0029 890.0566 33.69987 3.86605 14.94634
7 29.36873 205.5811 862.5225 28.7318 0.636935 0.405686
8 30.32309 242.5847 919.4896 28.7318 1.591288 2.532199
9 30.00917 270.0825 900.5504 28.7318 1.277374 1.631683
10 30.35722 303.5722 921.5607 28.7318 1.625419 2.641987
11 31.32665 344.5931 981.3589 28.7318 2.59485 6.733247
12 30.32309 363.877 919.4896 28.7318 1.591288 2.532199
13 30.42026 395.4633 925.392 28.7318 1.688458 2.850891
14 30.67126 429.3976 940.726 28.7318 1.939459 3.761502
15 32.30561 484.5841 1043.652 28.7318 3.573808 12.7721
16 30.80441 492.8705 948.9114 28.7318 2.072607 4.295701
136 481.7165 4149.609 14516.16
8.5 30.10728 259.3506 907.26 65.60819
4.686299
2.164786

Intercept 28.7318
Slope 0.161821
Std Error 0.540026 Interpretation: At 1 Std Dev there is 68% probability that the value will be 0.54 in positive or negative direction.

Coefficient 0.828011
0.828011
 t Year Quarter Material Price Ft Error Cum Error Abs Dev Cum Abs Dev MADs Tracking Signal MA%E
1 1 28.6 28.11453 0.485472 0.485472271 0.485472 0.485472271 0.485472 1.00 1.70%
2 2 28.1 27.75642 0.343576 0.829048452 0.343576 0.829048452 0.414524 2.00 1.22%
Year 1
3 3 29.2 29.84527 -0.64527 0.183774572 0.645274 1.474322333 0.491441 0.37 2.21%
4 4 30 30.51936 -0.51936 -0.335583534 0.519358 1.993680438 0.49842 -0.67 1.73%
5 1 28.9 28.74436 0.15564 -0.179943387 0.15564 2.149320585 0.429864 -0.42 0.54%
6 2 28.5 28.37477 0.12523 -0.054713845 0.12523 2.274550127 0.379092 -0.14 0.44%
Year 2
7 3 30 30.50647 -0.50647 -0.56118646 0.506473 2.781022742 0.397289 -1.41 1.69%
8 4 31.5 31.19177 0.308234 -0.252952938 0.308234 3.089256263 0.386157 -0.66 0.98%
9 1 29.2 29.37419 -0.17419 -0.427144915 0.174192 3.263448241 0.362605 -1.18 0.60%
10 2 29 28.99312 0.006883 -0.420262013 0.006883 3.270331143 0.327033 -1.29 0.02%
Year 3
11 3 32 31.16767 0.832329 0.412066638 0.832329 4.102659794 0.372969 1.10 2.60%
12 4 31.5 31.86417 -0.36417 0.047891787 0.364175 4.466834646 0.372236 0.13 1.16%
13 1 29.6 30.00402 -0.40402 -0.356132315 0.404024 4.870858747 0.374681 -0.95 1.36%
14 2 29.3 29.61146 -0.31146 -0.667596052 0.311464 5.182322484 0.370166 -1.80 1.06%
Year 4
15 3 33 31.82887 1.17113 0.503533865 1.17113 6.353452401 0.423563 1.19 3.55%
16 4 32 32.53658 -0.53658 -0.03304936 0.536583 6.890035625 0.430627 -0.08 1.68%

-0.03305 High 1.00

Low -1.00
Max Min Max Min
Values Tracking
1.00 -1.00 0 0
2.50
1.00 -1.00 1 0
1.00 -1.00 0 0 2.00
1.00 -1.00 0 0 1.50
1.00 -1.00 0 0
1.00
1.00 -1.00 0 0
1.00 -1.00 0 1 0.50
1.00 -1.00 0 0
0.00
1.00 -1.00 0 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
1.00 -1.00 0 1 -0.50
1.00 -1.00 1 0 -1.00
1.00 -1.00 0 0
-1.50
1.00 -1.00 0 0
1.00 -1.00 0 1 -2.00
1.00 -1.00 1 0
1.00 -1.00 0 0
3 4
 t Year Months Material Price
1 1 10
2 2 10.2
3 3 9.8
4 4 11
5 5 15
6 6 18
Year 1
7 7 19
8 8 20
9 9 15
10 10 12
11 11 11
12 12 10.5
13 1 11
14 2 11.2
15 3 10.9
16 4 11.5
17 5 16
18 6 21
Year 2
19 7 24
20 8 25
21 9 19
22 10 18
23 11 17
24 12 14
25 1 11.9
26 2 12
27 3 12.2
28 4 13
29 5 21
30 6 28
Year 3
31 7 30
32 8 31
 Year 3
t Year Months Material Price
33 9 25
34 10 22
35 11 19
36 12 18

a. Deseasonalize the data

b. Apply MA, WMA, Exponential Smoothing, ES with Trend and Least Square Methods to forecast it. And Graph
c. Tell us which of the above five methods have least errors.
d. Create tracking error model for all forecasts with all methods
e Which method is the bbest for forecast
t m At MA CMA De
1 1 50
2 2 100
3 3 200
4 4 800
5 5 1000
6 6 1500 600 600.416667
7 7 1200 600.833333 601.666667
8 8 1000 602.5 604.166667
9 9 900 605.833333 612.5
10 10 300 619.166667 627.5
11 11 100 635.833333 648.333333
12 12 50 660.833333 670.833333
13 1 60 680.833333 689.166667
14 2 120 697.5 705
15 3 240 712.5 715
16 4 960 717.5 718.333333
17 5 1200 719.166667 719.583333
18 6 1800 720 720.5
19 7 1440 721 722
20 8 1200 723 725
21 9 1080 727 735
22 10 360 743 753
23 11 120 763 778
24 12 60 793 805
25 1 72 817 827
26 2 144 837 846
27 3 288 855 858
28 4 1152 861 862
29 5 1440 863 863.5
30 6 2160 864 864.6
31 7 1728 865.2 866.4
32 8 1440 867.6 870
33 9 1296 872.4 882
34 10 432 891.6 903.6
35 11 144 915.6 933.6
36 12 72 951.6 966
37 1 86.4 980.4 992.4
38 2 172.8 1004.4 1015.2
39 3 345.6 1026 1029.6
40 4 1382.4 1033.2 1034.4
41 5 1728 1035.6 1036.2
42 6 2592 1036.8 1037.52
43 7 2073.6 1038.24 1039.68
44 8 1728 1041.12 1044
45 9 1555.2 1046.88 1058.4
46 10 518.4 1069.92 1084.32
47 11 172.8 1098.72 1120.32
48 12 86.4 1141.92 1159.2
49 1 103.68 1176.48 1190.88
50 2 207.36 1205.28 1218.24
51 3 414.72 1231.2 1235.52
52 4 1658.88 1239.84 1241.28
53 5 2073.6 1242.72 1243.44
54 6 3110.4 1244.16 1245.024
55 7 2488.32 1245.888 1247.616
56 8 2073.6 1249.344 1252.8
57 9 1866.24 1256.256 1270.08
58 10 622.08 1283.904 1301.184
59 11 207.36 1318.464 1344.384
60 12 103.68 1370.304 1391.04
61 1 124.416 1411.776 1429.056
62 2 248.832 1446.336 1461.888
63 3 497.664 1477.44 1482.624
64 4 1990.656 1487.808 1489.536
65 5 2488.32 1491.264 1492.128
66 6 3732.48 1492.992 1494.0288
67 7 2985.984 1495.0656 1551.71258
68 8 2488.32 1608.35956 1663.89434
69 9 2239.488 1719.42912 1704.36096
70 10 746.496 1689.2928 1639.3536
71 11 248.832 1589.4144 1436.33829
72 12 124.416 1283.26217 1141.36869
73 1 149.2992 999.4752 999.4752