Ppic Report 1 Forecasting PDF

PRODUCTION PLANNING
AND INVENTORY CONTROL

FORECASTING
Lecturer:
Anastasia Lidya Maukar ST., MSC., MMT.
Arranged by:
Raka Dhanendra Wicaksono 004201700030

Rifky Fauzi Nugraha 004201700003
Rosita Milen 004201700008
Muhammad Zahrul Auzan 004201700029
Dzaky Fitrah Herlambang 004201700035
INDUSTRIAL ENGINEERING
PRESIDENT UNIVERSITY
Jababeka Education Park, Ki Hajar Dewantara Street, Kota Jababeka,

West Cikarang, Bekasi 17550 – Indonesia
Phone (021) 8910 9762-6, Fax (021) 8910 9768
Email: enrollment@president.ac.id, http://www.president.ac.id
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ACKNOWLEDGMENT
Authors would like to say thank you for God because he gives authors a lot of mercy
and blessing which makes authors can finish this “Forecasting” report kindly.
Authors realized without the other helped, this report cannot complete decently. On
this occasion, the authors would like to say thanks to some people who already
supported authors to do this report.
a. Mrs. Anastasia Lidya Maukar, as a lecturer of Production Planning and
Inventory Control, the one who already guided authors, as well as authors,
could make this report.
b. Authors’ family which already give author support that makes authors can
make this report very well.
c. Authors’ friends that cannot authors said the name one by one. The friends who
already support and help authors to do this report.
The final word the author realized that in the writing of this Forecasting Report is
still far from perfection. Therefore, the authors invoke suggestions and criticisms
which is built for the sake of perfection and may be useful for all of us. Hopefully,
this report can give new knowledge that can provide a benefit for the readers.
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TABLE OF CONTENT
ACKNOWLEDGMENT .......................................................................................... i
TABLE OF CONTENT .......................................................................................... ii
CHAPTER I INTODUCTION ................................................................................ 1
1.1 Background ................................................................................................... 1
1.2 Objectives ...................................................................................................... 1
1.3 Tools and Equipment..................................................................................... 2
1.4 Steps .............................................................................................................. 2
CHAPTER II LITERATURE STUDY ................................................................... 3
2.1 Principle of Forecasting................................................................................. 3
2.2 Characteristics of Good Forecasting ............................................................. 4
2.3 The Basic Step in a Forecasting Task............................................................ 6
2.4 Forecast Goal ................................................................................................. 8
2.5 Forecast Time Horizon .................................................................................. 8
2.6 Types of Forecasting Methods ...................................................................... 9
2.6.1 Qualitative Forecasting Method.............................................................. 9
2.6.2 Quantitative Forecasting Method............................................................ 9
2.7 Measurement of Forecasting Error .............................................................. 21
2.7.1 Mean Absolute Deviation (MAD) = Mean Absolute Error (MAE) ..... 21
2.7.2 Mean Squared Error (MSE) .................................................................. 21
2.7.3 Mean Absolute Percentage Error (MAPE) ........................................... 21
2.7.4 Standard Error of Estimate (SEE) ......................................................... 22
2.7.5 Mean Error (ME) .................................................................................. 22
2.7.6 Symmetric Mean Absolute Percentage Error (SMAPE) ...................... 23
2.8 Validation of Forecasting Error ................................................................... 23
2.8.1 Verification Test ................................................................................... 23
2.8.2 Tracking Signal test .............................................................................. 24
CHAPTER III DATA COLLECTION ................................................................. 26
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CHAPTER IV DATA ANALYSIS ...................................................................... 27
4.1 Scatterplot Diagram ..................................................................................... 27
4.2 Forecasting Methods to Forecast Six-Month Demand (Sept 2018– Feb
2019) .................................................................................................................. 28
4.2.1 Double Moving Average (DMA) ......................................................... 28
4.2.2 Double Exponential Smoothing-Browns .............................................. 39
4.2.3 Double Exponential Smoothing-Holt ................................................... 52
4.2.4 Regression Analysis (Cyclic Method) .................................................. 62
4.2.5 Regression Analysis (Linear Cyclic Method) ....................................... 74
4.3 Compare All Methods and Choose the Best Method .................................. 87
4.3.1 Normality Test ...................................................................................... 88
4.3.2 Autocorrelation Test ............................................................................. 91
4.4 Demand Forecast for Six Months Ahead .................................................... 92
CHAPTER V CONCLUSION .............................................................................. 96
REFERENCES...................................................................................................... 97
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CHAPTER I
INTRODUCTION
1.1 Background
At this time when competitiveness is more needed among companies, inventory
planning for demand management and sales forecasting is needed so that the
company can run well, more effectively and more efficiently. Forecasting is the
process of making predictions of the future based on past and present data and most
commonly by analysis of trends. Forecasting is about predicting the future as
accurately as possible, given all of the information available, including historical
data and knowledge of any future events that might impact the forecasts. In other
words, forecasting is most often used to predicting or estimating future demand.
Forecasting methods consist of two major groups which are qualitative methods
and quantitative methods.
The purpose of this production planning and inventory control assignment is to

forecast the demand in the future. The data come from the demand for Product car
toys over the last 20 months. The forecast data will provide the information to
choose a better decision. In this assignment, the data will be forecast a six-month
demand from September 2018 until February 2019.
This report will record all of the forecasting data from several methods and, the data
will be analyzed and the conclusion can be taken to determine which one the most
appropriate method to predict future data. The best method of forecasting is should
be a more accurate method.
1.2 Objectives
In the making of this report, we have several objectives to accomplish, such as:
a. To determine each forecasting demand.
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b. To evaluate every forecasting method.
c. To analyze the trend of data.
d. To determine the scatter diagram for the demand data.
e. To evaluate the method in point using MAD, MSE, and MAPE.
f. To validate each forecasting method.
g. To analyze the forecasting method and give the analysis based on calculation.
1.3 Tools and Equipment

The tools and equipment that were used for this report are:
a. Minitab
b. Internet
c. Microsoft Word
d. Microsoft Excel
e. Paper
f. Pen
g. Calculator
1.4 Steps
There are several steps, like:
a. Draw the scatter diagram for the demand data over the last twenty months.
b. Do the analyze from the scatter diagram and decide the trend of the diagram.
c. Determine the several forecasting methods to forecast a six-month demand from
September 2018 until February 2019.
d. Evaluate the methods in point using MAD, MSE, and MAPE.
e. Do the validation of each forecasting method using IIDN and verification and
tracking signal
f. Compare and analyze which one the most appropriate method.
g. The result was analyzed.
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CHAPTER II
LITERATURE STUDY
Forecasting is the process of making predictions of the future based on past and
present data and most commonly by analysis of trends. A commonplace example
might be an estimation of some variable of interest at some specified future
date. Prediction is a similar, but more general term. Both might refer to formal
statistical methods employing time series, cross-sectional or longitudinal data, or
alternatively to less formal judgmental methods. (Wikipedia, 2019) In other
definition, Forecasting is a technique that uses historical data as inputs to make
informed estimates that are predictive in determining the direction of future trends.
Businesses utilize forecasting to determine how to allocate their budgets or plan for
anticipated expenses for an upcoming period of time. This is typically based on the
projected demand for the goods and services offered. (Tuovila, 2019)
According to Subagyo (2002), Forecasting is a forecast that has not happened yet.
In social science, everything is uncertain, difficult to estimate precisely, therefore
used forecasting that aims for forecast or forecasting made can minimize the
influence of this uncertainty on the company.
2.1 Principle of Forecasting

There are many types of forecasting models. They differ in their degree of
complexity, the amount of data they use, and the way they generate the forecast.
However, some features are common to all forecasting models. They include the
following: (Unknown, 2019)
a. Forecasts are rarely perfect. Forecasting the future involves uncertainty.

Therefore, it is almost impossible to make a perfect prediction. Forecasters
know that they have to live with a certain amount of error, which is the
difference between what is forecast and what actually happens. The goal of
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forecasting is to generate good forecasts on average over time and to keep
forecast errors as low as possible.
b. Forecasts are more accurate for groups or families of items rather than for
individual items. When items are grouped together, their individual high and
low values can cancel each other out. The data for a group of items can be stable
even when individual items in the group are very unstable. Consequently, one
can obtain a higher degree of accuracy when forecasting for a group of items
rather than for individual items.
c. The forecast is more accurate for shorter than longer time periods. In the
short term, conditions affecting demand tend to remain or change slowly, so
short-term forecasting is more accurate.
d. Forecasting involves errors. Forecasting only reduces uncertainty but does not
eliminate it. forecasters must be aware of this so they are ready to face
forecasting errors.
e. Forecasting should use forecast errors. An error in forecasting resulted in the
user must know the size of the forecast.
f. If possible, count requests rather than predict them. in the MTS industry,
demand forecasting (independent demand) is carried out to develop a master
production schedule. component and material needs (dependent demand) to
support the parent product schedules are done by counting and not by
predicting.
2.2 Characteristics of Good Forecasting

A prediction or estimation of future demand for the product is known as demand
forecasting. Generally, every business firm predicts a number of related forecasts.
Since the future is uncertain, these forecasts may not be hundred percent correct.
But every firm tries to obtain the forecasts as precisely as possible. A demand
forecast is said to be good or efficient when the expected market demand is very
near or equal to the actual market demand. This may be estimated closely if proper
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method of demand forecasting is chosen. However, the following are the criteria
for a good demand forecasting method. (Knowledge Team, 2017)
The criteria of a good demand forecasting method are:
a. Accuracy: denotes near to actual demand. A firm should forecast its demand
very close to the actual market demand so that required quantities could be made
available for the market. An inaccurate forecast may cost huge to the firm. It
may create over or under production. Forecast should be explicit. For example,
there would be an increase in sales in the next year than the current is not a good
forecast but there would be an increase in sales by 20% in the next year is an
accurate forecast.
b. Longevity or Durability: Demand forecast generally takes huge time, money
and planning. Since a forecast takes a lot of time and money, it should be used
for longer span of time or multiple years. A forecast for short span of time may
not be effective for the organization.
c. Flexibility or Scale-ability: A demand forecast should be flexible and
adaptable to any kind of change. Nowadays there is a rapid change in the tastes
and preferences of consumers. This affects the demand for different products
up to a great extent. Therefore, the demand forecasts made by a firm should be
able to reflect those changes accordingly. Apart from this, a business firm, while
making forecasts, should consider various business risks that may take place in
the future.
d. Acceptability and Simplicity: Acceptability is one of the most important
criteria of a good demand forecasting method. That means a forecast should be
acceptable to all. It should also be as simple as possible. A business firm should
forecast its market demand by using simple and easy methods so that the
organizations do not face any complexities. However, some companies
generally prefer advanced statistical methods, which may prove difficult and
complex.
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e. Availability: A good demand forecasting method should have adequate and up-
to-date data available. The forecasts should be done in a timely manner so that
necessary arrangements could be made related to the market demand. Data
should be available to the decision-makers at all times.
f. Plausibility and Possibility: It denotes that the demand forecasts should be
reasonable so that they are easily understood by individuals who will use it.
Again, it should have the quality of application in the changing business
conditions.
g. Economy: A good demand forecasting method should have a relationship with
costs and benefits. It should be economically effective. The forecasting should
be made in such a way that the costs do not exceed the benefits that will be
derived from it. Costs should be less and benefits should be high.
h. Yielding quick results: A good demand forecasting method should yield quick
results rather than taking a longer period to respond. It should match with the
changing business environment.
i. Maintenance of timeliness: It should take care of timelines. Data should be
available to users as and when requires so that decision making does not
hamper.
2.3 The Basic Step in a Forecasting Task

A forecasting task usually involves five basic steps.
a. Step 1: Problem definition.

Often this is the most difficult part of forecasting. Defining the problem
carefully requires an understanding of the way the forecasts will be used, who
requires the forecasts, and how the forecasting function fits within the
organization requiring the forecasts. A forecaster needs to spend time talking
to everyone who will be involved in collecting data, maintaining databases,
and using the forecasts for future planning.
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b. Step 2: Gathering information.
There are always at least two kinds of information required: (a) statistical
data, and (b) the accumulated expertise of the people who collect the data and
use the forecasts. Often, it will be difficult to obtain enough historical data to
be able to fit a good statistical model. Occasionally, old data will be less
useful due to structural changes in the system being forecast; then we may
choose to use only the most recent data. However, remember that a good
statistical model will handle evolutionary changes in the system; don’t throw
away good data unnecessarily.
c. Step 3: Preliminary (exploratory) analysis.
Always start by graphing the data. Are there consistent patterns? Is there a
significant trend? Is seasonality important? Is there evidence of the presence
of business cycles? Are there any outliers in the data that need to be explained
by those with expert knowledge? How strong are the relationships among the
variables available for analysis? Various tools have been developed to help
with this analysis.
d. Step 4: Choosing and fitting models.
The best model to use depends on the availability of historical data, the
strength of relationships between the forecast variable and any explanatory
variables, and the way in which the forecasts are to be used. It is common to
compare two or three potential models. Each model is itself an artificial
construct that is based on a set of assumptions (explicit and implicit) and
usually involves one or more parameters that must be estimated using the
known historical data.
e. Step 5: Using and evaluating a forecasting model.
Once a model has been selected and its parameters estimated, the model is
used to make forecasts. The performance of the model can only be properly
evaluated after the data for the forecast period has become available. A
number of methods have been developed to help in assessing the accuracy of
forecasts. There are also organizational issues in using and acting on the
forecasts. (Armstrong, 2001)
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2.4 Forecast Goal
The goal of any forecasting system is to provide forecasts of the appropriate
accuracy in a timely manner and at a reasonable cost. A timely forecast is
determined by its use. The basic tradeoff in forecasting is between response to
change and stability. If the high demand reflected a change in the demand pattern,
should increase the production, but if it was just a random fluctuation, should not.
A good forecasting system will reach to actual changes but ignore chance variation.
(Daniel Sipper and Robert L. Bulfin, 1997)
2.5 Forecast Time Horizon

Forecasting should be an integral part of the decision-making activities of
management, as it can play an important role in many areas of a company.
Modern organizations require short-term, medium-term and long-term forecasts,
depending on the specific application.
a. Short-term forecasts are needed for the scheduling of personnel, production,

and transportation. As part of the scheduling process, forecasts of demand are
often also required.
b. Medium-term forecasts are needed to determine future resource
requirements, in order to purchase raw materials, hire personnel, or buy
machinery and equipment.
c. Long-term forecasts are used in strategic planning. Such decisions must take
account of market opportunities, environmental factors, and internal
resources.
An organization needs to develop a forecasting system that involves several

approaches to predicting uncertain events. Such forecasting systems require the
development of expertise in identifying forecasting problems, applying a range
of forecasting methods, selecting appropriate methods for each problem, and
evaluating and refining forecasting methods over time. It is also important to
have strong organizational support for the use of formal forecasting methods if
they are to be used successfully. (Armstrong, 2001)
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The function of this review of future vision is to assist decision-makers in choosing
alternative those are the direction of their decisions, and then to look at the
consequences of those decisions in the future. One of the data sources that can be
used for forecasting is the production record/time series of the agency concerned.
2.6 Types of Forecasting Methods

Forecasting methods can be classified into two groups: qualitative and quantitative.
2.6.1 Qualitative Forecasting Method

A forecast is made subjectively by the forecaster. If there are no data available, or
if the data available are not relevant to the forecasts, then qualitative
forecasting methods must be used. These methods are not purely guesswork-
there are well-developed structured approaches to obtaining good forecasts
without using historical data (Armstrong, 2001). Qualitative forecasting methods,
often called judgmental methods, are methods in which the forecast is made
subjectively by the forecaster. They are educated guesses by forecasters or experts
based on intuition, knowledge, and experience. When decide, based on your
intuition, that a particular team is going to win a baseball game, you are making a
qualitative forecast. Because qualitative methods are made by people, they are often
biased.
2.6.2 Quantitative Forecasting Method

Quantitative methods: These types of forecasting methods are based on
mathematical (quantitative) models, and are objective in nature. They rely heavily
on mathematical computations. Quantitative forecasting can be applied when two
conditions are satisfied:
a. numerical information about the past is available;
b. it is reasonable to assume that some aspects of the past patterns will continue
into the future.
There is a wide range of quantitative forecasting methods, often developed within

specific disciplines for specific purposes. Each method has its own properties,
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accuracies, and costs that must be considered when choosing a specific method.
(Armstrong, 2001)
Most quantitative prediction problems use either time series data (collected at
regular intervals over time) or cross-sectional data (collected at a single point in
time). In this book we are concerned with forecasting future data, and we
concentrate on the time series domain. The table 2.1 shows the difference
between qualitative and quantitative methods.
Table 2.1 Types of Forecasting Methods
2.6.2.1 Extrinsic Methods (Causal Approach)

Extrinsic methods also use internal or external factors that associated with
demand for the item, possibly in a causal relationship. In the extrinsic method,
the method divided into two sub-methods are:
2.6.2.1.1 Simple Linear Regression

Simple Linear Regression, in which a single numerical independent Variable (X)
is used to predict the numerical dependent variable Y, such as using the size of a
store to predict the annual sales of the store. The aim of regression analysis is to
develop a model to predict the values of a numerical variable, based on the value of
other variables. In regression analysis, the variable that wants to wish to predict is
called dependent variable.
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The variables used to make the prediction are called independent variables. In
addition to predicting values of the dependent variable, regression analysis also
allows to identify the type of mathematical relationship that exists between a
dependent variable and an independent variable, to quantify the effect that changes
in the independent variable have on the dependent variable, and to identify unusual
observation. Simple linear regression generally use one predictor only (independent
variable).
One variable denoted x is regarded as the predictor, explanatory, or independent

variable. The other variable denoted y is regarded as the response, outcome, or
dependent variable.
The assumptions of regression are linearity, independence of errors, normality of

error, and equal variance.
Ŷi  b 0  b1X i
(2-1)
Where:
Ŷi= Estimated (or predicted) Y value for observation i
b0 = Estimate of the regression intercept
b1= Estimate of the regression slope
2.6.2.1.2 Multiple Linear Regression

Multiple regression is a technique that allows additional factors to enter the analysis
separately so that the effect of each can be estimated. It is valuable for quantifying
the impact of various simultaneous influences upon a single dependent variable.
Further, because of omitted variables bias with simple regression, multiple
regression is often essential even when the investigator is only interested in the
effects of one of the independent variables.
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Multiple regression analysis is almost the same as simple linear regression. The
only difference between simple linear regression and multiple regression is in the
number of predictors (“x” variables) used in the regression. Simple regression
analysis uses a single x variable for each dependent “y” variable. For example: (x1,
y1).
1. Multiple Regression Model with k Independent Variables
Yi  β 0  β1X1i  β 2 X 2i      β k X ki  ε i
(2 – 2)
2. Multiple Regression Equation with k Independent Variables
Ŷi  b 0  b1X1i  b 2 X 2i      b k X ki
(2 – 3)
Where :
𝛽0 = Y intercept
𝛽1 = slope of Y with variable 𝑋1, holding variables 𝑋2,𝑋3,...,𝑋𝑘 constant
𝛽2 = slope of Y with variable 𝑋2, holding variables 𝑋1,𝑋3,...,𝑋𝑘 constant
𝛽𝑘 = slope of Y with variable 𝑋𝑘 , holding variables 𝑋1,𝑋2,𝑋3...,𝑋𝑘−1 constant
𝜀𝑖 = random error in Y for observations i
2.6.2.2 Intrinsic Methods (Time Series Approach)

Time series analysis is related to the statistical analysis of past data to forecast
future data. Time series are measured at specified intervals of time. In describing
these time series, we have used words such as “trend” and “seasonal” which need
to be defined more carefully. Time analysis series consists of:
a. Trends. A trend exists when there is a long-term increase or decrease in the
data. It does not have to be linear. Sometimes we will refer to a trend as
“changing direction”. There will be two types of trends which are positive
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trends and negative trends. Trends are related with long-term persistent
movements/tendencies/changes in the data. It can be positive changes
(increases of the data) and the negative changes (decreases of the data).
b. Seasonal Components. A seasonal pattern occurs when a time series is
affected by seasonal factors such as the time of the year or the day of the
week. Seasonality is always of a fixed and known frequency. The seasonal
component is patterns of high and low demand that recur each year. They
may due weather, holiday such as Christmas and Easter, school starting dates.
c. Cyclic is a periodic movement alternating between peak and valleys have
long been a subject of study by business economist. Cycles usually last
several years and so are normally not included in short term forecasting
models but do play a role in long-range forecasting. A cycle occurs when the
data exhibit rises and falls that are not of a fixed frequency. These fluctuations
are usually due to economic conditions, and are often related to the “business
cycle”. The duration of these fluctuations is usually at least 2 years.
d. Irregular Variations may be episodic or random. Episodic Variations are
attributable to nonrecurring causes such as a fire at a competitor’s plant, a
strike at a plant of a major customer, or a special promotion. Random
Variations, on the other hand, maybe the result of many small factors, and no
single major cause can be assigned.
https://slideplayer.com/slide/5177687/
Figure 2.1 Time Series
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2.6.2.2.1 Last Period Demand (LPD)
The last period demand or Naïve technique simply forecasts for the next period the
actual demand that occurred in the previous period.
dt’ = dt-1
(2-4)
Where, dt’ is the forecasted demand for period t and dt-1 is the actual demand
in the previous period (period t-1).
2.6.2.2.2 Arithmetic Average (Average Methods)

The arithmetic average or called average methods simply take the average of all
past demand in arriving at a forecast.
𝑑1 + 𝑑2 + ⋯ + 𝑑𝑛 ∑𝑛𝑡=1 𝑑𝑡
𝑑𝑡’ = =
𝑛 𝑛
(2-5)
Where, dt’ is the number of forecasted demand for period t, dt is actual demand in
period t and n is the number of time periods.
2.6.2.2.3 Single Moving Average (SMA)

Simple Moving Average (SMA) is the un-weighted mean of the previous n data.
However, in science and engineering, the mean is normally taken from an equal
number of data on either side of a central value. This ensures that variations in the
mean are aligned with the variations in the data rather than being shifted in
time. The moving average technique generates the next period’s forecast by
averaging the actual demand for the last N time periods. The choice of the value of
N should be determined by experimentation and often lies within the range of 3 to
8 (Tersine) and 5 to 7 (Smith). Response to change will be slow if the N is large for
stable demand. The response to change will be fast if the N is small for the demand
subject frequent significant change.
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𝑑𝑡−1 +𝑑𝑡−2 +⋯+𝑑𝑡−𝑁 ∑𝑁
𝐼=1 𝑑𝑡−𝑖
SMA (N) = dt’ = =
𝑁 𝑁
(2-6)
Where−𝑖 is actual demand in period t-i and N is the number of time periods includes
in moving average.
2.6.2.2.4 Weighted Moving Average (WMA)

A weighted average is an average that has multiplying factors to give different
weights to data at different positions in the sample window. Mathematically, the
weighted moving average is the convolution of the datum points with a fixed
weighting function.
In technical analysis of financial data, a weighted moving average (WMA) has the
specific meaning of weights that decrease in arithmetical progression.[4] In an n-day
WMA, the latest day has weight n, the second latest n − 1, etc., down to one.
𝐶𝑡−1 𝑑𝑡−1 +𝐶𝑡−2 𝑑𝑡−2 +⋯+𝐶𝑡−𝑁 𝑑𝑡−𝑁 ∑𝑁

𝐼=1 𝐶𝑡−1 𝑑𝑡−1
WMA (N) = dt’ = ∑𝐶
= ∑𝐶
(2-7)
Where C is the weight.
2.6.2.2.5 Single Exponential Smoothing (SES)

This method is suitable for forecasting data with no trend or seasonal pattern. The
formula of single exponential smoothing is:
𝑑𝑡′ = 𝛼. 𝑑𝑡−1 + (1 − 𝛼) 𝑑𝑡−1 ′
(2-8)
where α is the smoothing factor, and 0 < α < 1. In other words, the smoothed
statistic st' is a simple weighted average of the current observation xt and the
previously smoothed statistic st−1. The term smoothing factor applied to α here is
something of a misnomer, as larger values of α actually reduce the level of
smoothing, and in the limiting case with α = 1 the output series is just the current
observation. Simple exponential smoothing is easily applied, and it produces a
smoothed statistic as soon as two observations are available.
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Initial is needed for the first price or d1’ and α. Initial for d1’ usually chosen from
one of the steps in the following a) the value d1 or b) the average of first 4 -5 month
actual demand (dt)
2
Correlation between 𝛼 and N : 𝛼 = 𝑁+1
(2-9)
2.6.2.2.6 Double Moving Average (DMA)

Applies the moving average technique twice, once to the original data and then to
the resulting single moving average data. This method then uses both sets of
smoothed data to project forward. This method is best for historical data with a
trend but no seasonality. It results in a straight, sloped-line forecast. In this method,
the calculation of moving averages as much as two times then followed by
predicting using a certain equation.
For the double moving average, the procedure is:

1. Calculate the Single Moving Average from the data set and denoted as St’
2. Calculate the second moving average namely moving average from St’ and
denoted as St”
3. Calculate the component (at) with the formula in the following,
𝑎𝑡 = 𝑆𝑡′ + (𝑆𝑡′ − 𝑆𝑡′′ ) = 2𝑆𝑡′ − 𝑆𝑡 ′′
(2-10)
4. Calculate component of trend (bt) with the formula in the following,
2
𝑏𝑡 = (𝑁−1) (𝑆𝑡′ − 𝑆𝑡 ′′)
(2-11)
5. Forecasting for period m in the future (dt’) after t is :
Ft+m = at + bt . m
(2-12)
2.6.2.2.7 Double Exponential Smoothing (DES) – Browns Method

Double Exponential Smoothing is an improvement of Simple Exponential
Smoothing, also known as Exponential Moving Average, which does the
exponential filter process twice.
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For the double exponential smoothing – Browns Method, the procedure is:
1. Create the first Exponential Smoothing,
St’ = 𝛼. 𝑑𝑡 + (1 − 𝛼) 𝑆𝑡−1
(2-13)
2. Create the second Exponential Smoothing,
St”= 𝛼. 𝑑𝑡 + (1 − 𝛼) 𝑆𝑡−1 "
(2-14)
3. Calculate the component (at)

at = 2St’ – St’’
(2-15)
4. Calculate the component (bt)
2
bt = 1−𝛼 St’ – St’’
(2-16)
5. Forecasting for period m in the future, like in the formula 2-12.
2.6.2.2.8 Double Exponential Smoothing (DES) – Holt Method

The double exponential smoothing-Holt method has two parameters. In the
weighting parameters, the new value has greater than previous observations. In
addition, there is weighted to estimate the trend of data. Generally, Holt has two
smoothing constants (the values between 0 and 1) and three equations. For the
double exponential smoothing – Holt Method, the procedure is:
1. Create the first Smoothing,
𝑆𝑡 ′ = 𝑎. 𝑑𝑡 + (1 − 𝑎)(𝑆𝑡 − 1 + 𝑏𝑡 − 1)
(2-17)
2. Create the smoothing for trend,
𝑏𝑡 = 𝛾 (𝑆𝑡 − 𝑆𝑡 − 1) + (1 − 𝛾)𝑏𝑡 − 1
(2-18)
3. Forecasting for period m in the future,
𝐹𝑡 + 𝑚 = 𝑆𝑡 + 𝑏𝑡(𝑚)
(2-19)
17
2.6.2.2.9 Triple Exponential Smoothing (TES) – Winter Method
Triple exponential smoothing applies exponential smoothing three times, which is
commonly used when there are three high-frequency signals to be removed from a
time series under study. There are different types of seasonality: 'multiplicative' and
'additive' in nature, much like addition and multiplication are basic operations in
mathematics. Triple Exponential Smoothing method is used when the data indicates
a trend and seasonal behavior.
𝑋𝑡
𝑆𝑡 = 𝑎 + (1 − 𝑎)(𝑆𝑡 − 1 + 𝑏𝑡 − 1)
𝐼𝑡−𝐿
(2-20)
𝑏𝑡 = 𝛽 (𝑆𝑡 − 𝑆𝑡 − 1) + (1 − 𝛽)𝑏𝑡 − 1
(2-21)
𝑋𝑡
𝐼𝑡 = 𝛾 ( ) + (1 − 𝛾)𝐼𝑡 − 𝐿
𝑆𝑡
(2-22)
𝐹𝑡 + 𝑚 = 𝑆𝑡 + 𝑏𝑡(𝑚) 𝑥 𝐼𝑡−𝐿+𝑚
(2-23)
is the coefficient random factors (0<𝑥<1), is the coefficient trend factors (0< 𝑥 <1),
is the coefficient of seasonal factors (0< 𝑥 <1).
2.6.2.2.10 Regression Analysis

Regression analysis is a set of statistical processes for estimating the relationships
among variables. It includes many techniques for modeling and analyzing several
variables when the focus is on the relationship between a dependent variable and
one or more independent variables (or 'predictors').
a. The formula for regression analysis constant in the following:
∑𝑛𝑡−1 𝑑𝑡
𝑑𝑡 ′ =
𝑛
(2-24)
18
b. The formula for regression analysis linear in the following:
𝑑𝑡 ′ = 𝑎 + 𝑏𝑡
(2-25)
𝑛 ∑𝑛𝑡−1 𝑡. 𝑑𝑡 − ∑𝑛𝑡−1 𝑑𝑡 ∑𝑛𝑡−1 𝑡
𝑏=
𝑛 ∑𝑛𝑡−1 𝑡 2 − (∑𝑛𝑡−1 𝑡)2
(2-26)
c. The formula for regression analysis cyclic in the following:

2𝜋 2𝜋
𝑑𝑡 ′ = 𝑎 + 𝑏 𝑐𝑜𝑠 ( 𝑡) + 𝑐 𝑠𝑖𝑛 ( 𝑡)
𝑁 𝑁
(2-27)
(1)
𝑛 𝑛
𝑛 2𝜋 2𝜋
∑ 𝑑𝑡 = 𝑎. 𝑛 + 𝑏 ∑ cos ( t) + c ∑ sin ( t)
𝑡=1 𝑁 𝑁
𝑡=1 𝑡=1
(2-28)
(2)
𝑛 2𝜋
∑ 𝑑𝑡 cos ( t)
𝑡=1 𝑁
𝑛 𝑛 𝑛
2𝜋 2𝜋 2𝜋 2𝜋
= 𝑎 ∑ cos ( t) + 𝑏 ∑ 𝑐𝑜𝑠 2 ( t) + c ∑ sin ( t) cos ( t)
𝑁 𝑁 𝑁 𝑁
𝑡=1 𝑡=1 𝑡=1
(2-29)
(3)
𝑛 2𝜋
∑ 𝑑𝑡 sin ( t)
𝑡=1 𝑁
𝑛 𝑛 𝑛
2𝜋 2𝜋 2𝜋 2𝜋
= 𝑎 ∑ sin ( t) + 𝑏 ∑ 𝑐𝑜𝑠 ( t) sin ( t) + c ∑ sin ( t)
𝑁 𝑁 𝑁 𝑁
𝑡=1 𝑡=1 𝑡=1
(2-30)
19
d. The formula for regression analysis linear cyclic in the following:
2𝜋 2𝜋
𝑑𝑡 ′ = 𝑎 + 𝑏𝑡 + 𝑐 𝑐𝑜s ( t) + d sin ( t)
𝑁 𝑁
(2-31)
(1)
𝑛 𝑛 𝑛 𝑛
2𝜋 2𝜋
∑ 𝑑𝑡 = 𝑎. 𝑛 + 𝑏 ∑ 𝑡 + 𝑐 ∑ 𝑐𝑜𝑠( t ) + 𝑑 ∑ 𝑠𝑖𝑛( t )
𝑁 𝑁
𝑡=1 𝑡=1 𝑡=1 𝑡=1
(2-32)
(2)
𝑛 𝑛 𝑛 𝑛 𝑛
2
2𝜋 2𝜋
∑ 𝑑𝑡 . 𝑡 = 𝑎. ∑ 𝑡 + 𝑏 ∑ 𝑡 + 𝑐 ∑ 𝑡. 𝑐𝑜𝑠( t ) + 𝑑 ∑ 𝑡. 𝑠𝑖𝑛( t )
𝑁 𝑁
𝑡=1 𝑡=1 𝑡=1 𝑡=1 𝑡=1
(2-33)
(3)
𝑛 𝑛 𝑛 𝑛
2𝜋 2𝜋 2𝜋 2𝜋
∑ 𝑑𝑡 . 𝐶𝑜𝑠( t ) = 𝑎. ∑ 𝐶𝑜𝑠( t ) + 𝑏 ∑ 𝑡. 𝐶𝑜𝑠( t ) + 𝑐 ∑ 𝑐𝑜𝑠 2 ( t )
𝑁 𝑁 𝑁 𝑁
𝑡=1 𝑡=1 𝑡=1 𝑡=1
𝑛
2𝜋 2𝜋
+ 𝑑 ∑ 𝑠𝑖𝑛 ( t ) 𝐶𝑜𝑠( t )
𝑁 𝑁
𝑡=1
(2-34)
(4)
𝑛 𝑛 𝑛
2𝜋 2𝜋 2𝜋
∑ 𝑑𝑡 . 𝑆𝑖𝑛( t ) = 𝑎. ∑ 𝑠𝑖𝑛( t ) + 𝑏 ∑ 𝑡. 𝑠𝑖𝑛( t ) +
𝑁 𝑁 𝑁
𝑡=1 𝑡=1 𝑡=1
𝑛 𝑛
2𝜋 2𝜋 2𝜋
+ 𝑐 ∑ 𝑐𝑜𝑠 ( t ) 𝑠𝑖𝑛 ( t ) + 𝑐 ∑ 𝑠𝑖𝑛2 ( t )
𝑁 𝑁 𝑁
𝑡=1 𝑡=1
(2-35)
20
2.7 Measurement of Forecasting Error
Error measurement statistics play a critical role in tracking forecast accuracy,
monitoring for exceptions, and benchmarking your forecasting process.
Interpretation of these statistics can be tricky, particularly when working with low-
volume data or when trying to assess accuracy across multiple items. Measurement
of forecasting error used to test the performance of forecasting results. Sometimes
there is an error in the forecast and it can cause biased. The measurement of the
forecasting method in the following:
2.7.1 Mean Absolute Deviation (MAD) = Mean Absolute Error (MAE)

The formula of Mean Absolute Error or Mean Absolute Deviation is:
∑𝑛𝑡=1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑀𝐴𝐷 =
𝑛
(2-36)
The MAD is a good statistic to use when analyzing the error for a single item.
However, if you aggregate MADs over multiple items you need to be careful about
high-volume products dominating the results more on this later. (Stellwagen, 2011)
2.7.2 Mean Squared Error (MSE)

Mean Squared Error, (MSD) is measures the average of the squares of the errors or
deviations. The formula of MSE is:
∑𝑛𝑡=1(𝑑𝑡 − 𝑑𝑡 ′ )2
𝑀𝑆𝐸 =
𝑛
(2-37)
2.7.3 Mean Absolute Percentage Error (MAPE)

Mean Absolute Percent Error is a measure of prediction accuracy for a forecasting
method and expresses the answer as a percentage. The formulas of MAPE are:
21
dt−dt’
PE1 = x 100%
𝑑𝑡
(2-38)
∑𝑛𝑡=1 |PEt|
𝑀𝐴𝑃𝐸 =
𝑛
(2-39)
The MAPE is scale sensitive and should not be used when working with low-
volume data. Notice that because "Actual" is in the denominator of the equation,
the MAPE is undefined when the actual demand is zero. Furthermore, when the
actual value is not zero, but quite small, the MAPE will often take on extreme
values. This scale sensitivity renders the MAPE close to worthless as an error
measure for low-volume data. (Stellwagen, 2011)
2.7.4 Standard Error of Estimate (SEE)

Standard Error of Estimate is a measurement of the accuracy of predictions. The
formula of SEE is:
∑𝑛𝑡=1(𝑑𝑡 − 𝑑𝑡 ′ )2
𝑆𝐸𝐸 = √
𝑛−𝑓
(2-40)
Where, f is degree of freedom (constant = 1, Linier = 2, Cyclical Quadratic = 3,

Cyclical Linier = 4).
2.7.5 Mean Error (ME)

The formula of Mean Error is:
∑𝑛𝑡=1(𝑑𝑡 − 𝑑𝑡 ′ )
𝑀𝐸 =
𝑛
(2-41)
22
2.7.6 Symmetric Mean Absolute Percentage Error (SMAPE)
The SMAPE (Symmetric Mean Absolute Percentage Error) is a variation on the
MAPE that is calculated using the average of the absolute value of the actual and
the absolute value of the forecast in the denominator. This statistic is preferred to
the MAPE by some and was used as an accuracy measure in several forecasting
competitions. (Stellwagen, 2011)
2.8 Validation of Forecasting Error

A good way to test the assumptions of a model and to realistically compare its
forecasting performance against other models is to perform out-of-sample
validation, which means to withhold some of the sample data from the model
identification and estimation process, then use the model to make predictions for
the hold-out data in order to see how accurate they are and to determine whether
the statistics of their errors are similar to those that the model made within the
sample of data that was fitted. In the Forecasting procedure in Statgraphics, you are
given the option to specify the number of data points to hold out for validation and
a number of forecasts to generate into the future. The data which are not held out
are used to estimate the parameters of the model. The model is then tested on data
in the validation period, and forecasts are generated beyond the end of the
estimation and validation periods. (unknown, n.d.)
Validation of the forecasting model has two tests namely verification test and
tracking signal test.
2.8.1 Verification Test

The verification test is using for the out of control data. The following techniques
are designed to be used with the smallest amount of data. This test is dividing the
control chart into six sections on the same scale. The data is located in out of control,
if:
a. There is a UCL or LCL on the outside point.
b. From three consecutive points, there is two or more point in A area.
23
c. From five consecutive points, there is four or more point in B area.
d. There are eight consecutive points one of them.
The formula for verification test is shown below:
∑𝑛
𝑡=2 𝑀𝑅𝑡
MR =
𝑛−1
(2-42)
𝑀𝑅𝑡 = |(𝑑𝑡 ′ − 𝑑𝑡) − (𝑑 ′ 𝑡−1 − 𝑑𝑡−1 )
(2-43)
̅̅̅̅̅
UCL = +2.66 𝑀𝑅
(2-44)
̅̅̅̅̅
UCL = +2.66 𝑀𝑅
(2-45)
CL = 0
(2-46)
Region A is an area outside ± 2/3 (2.66 MR) = ± 1.77 MR (above +1.77 MR and
below -1.77 MR). Area B is an area outside ± 1/3 (2.66 MR) = ± 0.89 MR (above
+0.89 MR and below -0.89 MR). Region C is the area above or below the midline.
2.8.2 Tracking Signal test

A tracking signal indicates if the forecast is consistently biased high or low. It is
computed by dividing the cumulative error by MAD.
The formula of tracking signal-brown check in the following:
∑𝑛𝑡−1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑀𝐴𝐷 = 𝑀𝐴𝐸 =
𝑛
𝑅𝑆𝐹𝐸 ∑𝑛 ′
𝑡−1(𝑑𝑡−𝑑𝑡 )
𝑡𝑟𝑎𝑐𝑘𝑖𝑛𝑔 𝑠𝑖𝑔𝑛𝑎𝑙 = =
𝑀𝐴𝐷 𝑀𝐴𝐷
24
The formula of tracking signal-Trigg check in the following:
∑𝑛𝑡=1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
(𝑑𝑡 − 𝑑𝑡 ′ )
𝑇𝑟𝑎𝑐𝑘𝑖𝑛𝑔 𝑠𝑖𝑔𝑛𝑎𝑙 =
𝑀𝐴𝐷
25
CHAPTER III
DATA COLLECTION
Table 3.1 below shows the demand data over the last 20 months.
Table 3.1 Demand for Car Toy
Demand Demand
Month Month
(in units) (in units)
Jan 2017 1,620 Nov 2017 1,648

Feb 2017 1,674 Dec 2017 1,540
Mar 2017 1,708 Jan 2018 1,784
Apr 2017 1,782 Feb 2018 1,688
May 2017 1,623 Mar 2018 1,766
Jun 2017 980 Apr 2018 1,876
Jul 2017 1,322 May 2018 1,906
Aug 2017 1,567 Jun 2018 1,136
Sep 2017 1,434 Jul 2018 1,560
Oct 2017 1,609 Aug 2018 1,715
26
CHAPTER IV
DATA ANALYSIS
4.1 Scatterplot Diagram
Scatterplot of Demand (in units) vs Month

1900
1800
1700
Demand (in units)
1600
1500
1400
1300
1200
1100
1000
Jan 2017 Apr 2017 Jul 2017 Oct 2017 Jan 2018 Apr 2018 Jul 2018
Month
Figure 4.1 Scatterplot Diagram
Scatterplot of Demand (in units) vs Month

1900
1800
1700
Demand (in units)
1600
1500
1400
1300
1200
1100
1000
Jan 2017 Apr 2017 Jul 2017 Oct 2017 Jan 2018 Apr 2018 Jul 2018
Month
Figure 4.2 Scatterplot Diagram Using Connect Line
27
Figure 4.1 and Figure 4.2 as we can see it shows the seasonal component. It could
be seen from high and low demand that occurred in several months. From month
Jan 2017 – April 2017, the trend is significantly positive. Significantly, the demand
goes down from May – June 2017 and significantly positive again from June 2017
– August 2017. After that, the trend is going up until May 2018. The trend going
negative same happened in May – June 2018. After that, the trend is going up. So,
in conclusion, the scatterplot follows the seasonal pattern.
4.2 Forecasting Methods to Forecast Six-Month Demand (Sept 2018– Feb

2019)
4.2.1 Double Moving Average (DMA)

In this method, the calculation of moving averages as much as two times then
followed by predicting using a certain equation.
4.2.1.1 Forecast Six-Month Demand (Sept 2018– Feb 2019)
Here, there are different kinds of the number of time periods (N) included in double
moving averages, such as four, five, and six. The smallest error will be chosen to
be validated. To find the value of forecasting demand for N =4, using formula as
below.
1620+1674+1708+1782
𝑆4 ′ = = 1696
4
𝑎𝑡 = 𝑆𝑡′ + (𝑆𝑡′ − 𝑆𝑡′′ ) = 2𝑆𝑡′ − 𝑆𝑡 ′′
2
𝑏𝑡 = (𝑁−1) (𝑆𝑡′ − 𝑆𝑡 ′′)
So, the forecast demand for next month is like a formula below.
Ft+m = at + bt . m
28
Table 4.1 DMA Forecast Demand (N=4)
Demand
MA (4) MA (4) Forecast Absolute
Month T (in At bt
St' 4x4 St'' dt' Dev. (4)
units)
Jan 2017 1 1,620
Feb 2017 2 1,674
Mar 2017 3 1,708
Apr 2017 4 1,782 1696.00
May 2017 5 1,623 1696.75
Jun 2017 6 980 1523.25
Jul 2017 7 1,322 1426.75 1585.69 1267.81 -105.96
Aug 2017 8 1,567 1373.00 1504.94 1241.06 -87.96 1161.85 405.15
Sep 2017 9 1,434 1325.75 1412.19 1239.31 -57.63 1153.10 280.90
Oct 2017 10 1,609 1483.00 1402.13 1563.88 53.92 1181.69 427.31
Nov 2017 11 1,648 1564.50 1436.56 1692.44 85.29 1617.79 30.21
Dec 2017 12 1,540 1557.75 1482.75 1632.75 50.00 1777.73 -237.73
Jan 2018 13 1,784 1645.25 1562.63 1727.88 55.08 1682.75 101.25
Feb 2018 14 1,688 1665.00 1608.13 1721.88 37.92 1782.96 -94.96
Mar 2018 15 1,766 1694.50 1640.63 1748.38 35.92 1759.79 6.21
Apr 2018 16 1,876 1778.50 1695.81 1861.19 55.13 1784.29 91.71
May 2018 17 1,906 1809.00 1736.75 1881.25 48.17 1916.31 -10.31
Jun 2018 18 1,136 1671.00 1738.25 1603.75 -44.83 1929.42 -793.42
Jul 2018 19 1,560 1619.50 1719.50 1519.50 -66.67 1558.92 1.08
Aug 2018 20 1,715 1579.25 1669.69 1488.81 -60.29 1452.83 262.17
Sep 2018 21 1428.52
Oct 2018 22 1368.23
Nov 2018 23 1307.94
Dec 2018 24 1247.65
Jan 2019 25 1187.35
Feb 2019 26 1127.06
To find the value of forecasting demand for N =5 and N=6 the method is almost the
same with the formula above. But the difference in the average of the previous
demand based on the number of periods. For example, N=5, so average the values
of the previous 5 demand before, and the value of St’ and St” calculated. After that,
find the value of at and bt, and calculate forecast demand for next month.
29
Demand
Month T (in At Bt
units)
Jan 2017 1 1,620
Feb 2017 2 1,674
Mar 2017 3 1,708
Apr 2017 4 1,782
May 2017 5 1,623 1681.40
Jun 2017 6 980 1553.40
Jul 2017 7 1,322 1483.00
Aug 2017 8 1,567 1454.80
Sep 2017 9 1,434 1385.20 1511.56 1258.84 -63.18
Oct 2017 10 1,609 1382.40 1451.76 1313.04 -34.68 1195.66 413.34
Nov 2017 11 1,648 1516.00 1444.28 1587.72 35.86 1278.36 369.64
Dec 2017 12 1,540 1559.60 1459.60 1659.60 50.00 1623.58 -83.58
Jan 2018 13 1,784 1603.00 1489.24 1716.76 56.88 1709.60 74.40
Feb 2018 14 1,688 1653.80 1542.96 1764.64 55.42 1773.64 -85.64
Mar 2018 15 1,766 1685.20 1603.52 1766.88 40.84 1820.06 -54.06
Apr 2018 16 1,876 1730.80 1646.48 1815.12 42.16 1807.72 68.28
May 2018 17 1,906 1804.00 1695.36 1912.64 54.32 1857.28 48.72
Jun 2018 18 1,136 1674.40 1709.64 1639.16 -17.62 1966.96 -830.96
Jul 2018 19 1,560 1648.80 1708.64 1588.96 -29.92 1621.54 -61.54
Aug 2018 20 1,715 1638.60 1699.32 1577.88 -30.36 1559.04 155.96
Sep 2018 21 1547.52
Oct 2018 22 1517.16
Nov 2018 23 1486.80
Dec 2018 24 1456.44
Jan 2019 25 1426.08
Feb 2019 26 1395.72
30
Demand
Month T (in At bt
units)
Jan 2017 1 1,620
Feb 2017 2 1,674
Mar 2017 3 1,708
Apr 2017 4 1,782
May 2017 5 1,623
Jun 2017 6 980 1564.50
Jul 2017 7 1,322 1514.83
Aug 2017 8 1,567 1497.00
Sep 2017 9 1,434 1451.33
Oct 2017 10 1,609 1422.50
Nov 2017 11 1,648 1426.67 1479.47 1373.86 -21.12
Dec 2017 12 1,540 1520.00 1472.06 1567.94 19.18 1352.74 187.26
Jan 2018 13 1,784 1597.00 1485.75 1708.25 44.50 1587.12 196.88
Feb 2018 14 1,688 1617.17 1505.78 1728.56 44.56 1752.75 -64.75
Mar 2018 15 1,766 1672.50 1542.64 1802.36 51.94 1773.11 -7.11
Apr 2018 16 1,876 1717.00 1591.72 1842.28 50.11 1854.31 21.69
May 2018 17 1,906 1760.00 1647.28 1872.72 45.09 1892.39 13.61
Jun 2018 18 1,136 1692.67 1676.06 1709.28 6.64 1917.81 -781.81
Jul 2018 19 1,560 1655.33 1685.78 1624.89 -12.18 1715.92 -155.92
Aug 2018 20 1,715 1659.83 1692.89 1626.78 -13.22 1612.71 102.29
Sep 2018 21 1613.56
Oct 2018 22 1600.33
Nov 2018 23 1587.11
Dec 2018 24 1573.89
Jan 2019 25 1560.67
Feb 2019 26 1547.44
4.2.1.2 Evaluation of MAD, MSE, MAPE

There is three error measurement that is used to evaluate the forecasting method.
The first error measurement is MAD. To find the value of MAD, the total value of
|dt-dt’| should be found out and calculate the average of it. Here is an example of
N=4
31
∑𝑛 ′
𝑡=1 |𝑑𝑡−𝑑𝑡 | 2,742.41
𝑀𝐴𝐷 = = = 210.9546
𝑛 13
The second error measurement is MSE. To find the value of MSE, the total value
of (dt-dt’)2 should be found out and calculate the average of it.
∑𝑛 ′ 2
𝑡=1(𝑑𝑡−𝑑𝑡 ) 1,209,147.49
𝑀𝑆𝐸 = = = 93011.3451
𝑛 13
And the last find error measurement is MAPE. To find the value of MAPE, the total
value of |PEt| should be found out and calculate the average of it.
dt−dt’ ∑𝑛
𝑡=1 |𝑃𝐸𝑡| 191.55%
PE1 = x 100% MAPE = = = 14.73%
𝑑𝑡 𝑛 13
For N=5 and N=6, the method is the same using the formula of MAD, MSE, and
MAPE. After all of the error values already calculated, the lowest value of error
will be chosen
Table 4.4. Evaluation MAD, MSE, and MAPE (N=4)

N=4
Dt dt' dt-dt' |dt-dt’| (dt-dt’)2 Pet |PEt|
1,567 1161.85 405.15 405.15 164,146.52 25.86% 25.86%
1,434 1153.1 280.90 280.90 78,904.81 19.59% 19.59%
1,609 1181.69 427.31 427.31 182,593.84 26.56% 26.56%
1,648 1617.79 30.21 30.21 912.64 1.83% 1.83%
1,540 1777.73 -237.73 237.73 56,515.55 -15.44% 15.44%
1,784 1682.75 101.25 101.25 10,251.56 5.68% 5.68%
1,688 1782.96 -94.96 94.96 9,017.40 -5.63% 5.63%
1,766 1759.79 6.21 6.21 38.56 0.35% 0.35%
1,876 1784.29 91.71 91.71 8,410.72 4.89% 4.89%
1,906 1916.31 -10.31 10.31 106.30 -0.54% 0.54%
1,136 1929.42 -793.42 793.42 629,515.30 -69.84% 69.84%
1,560 1558.92 1.08 1.08 1.17 0.07% 0.07%
1,715 1452.83 262.17 262.17 68,733.11 15.29% 15.29%
SUM 2,742.41 1,209,147.49 191.55%

AVERAGE 210.9546 93011.3451 14.73%
MAD MSE MAPE
32
N=5
Dt dt' dt-dt' |dt-dt’| (dt-dt’)2 Pet |PEt|
1,609 1195.66 413.34 413.34 170849.96 25.69% 25.69%
1,648 1278.36 369.64 369.64 136633.73 22.43% 22.43%
1,540 1623.58 -83.58 83.58 6985.62 -5.43% 5.43%
1,784 1709.6 74.40 74.40 5535.36 4.17% 4.17%
1,688 1773.64 -85.64 85.64 7334.21 -5.07% 5.07%
1,766 1820.06 -54.06 54.06 2922.48 -3.06% 3.06%
1,876 1807.72 68.28 68.28 4662.16 3.64% 3.64%
1,906 1857.28 48.72 48.72 2373.64 2.56% 2.56%
1,136 1966.96 -830.96 830.96 690494.52 -73.15% 73.15%
1,560 1621.54 -61.54 61.54 3787.17 -3.94% 3.94%
1,715 1559.04 155.96 155.96 24323.52 9.09% 9.09%
SUM 2246.120 1055902.366 158.23%

AVERAGE 204.193 95991.124 12.17%
MAD MSE MAPE

N=6
Dt dt' dt-dt' |dt-dt’| (dt-dt’)2 PEt |PEt|
1,540 1352.74 187.26 187.26 35066.31 12.16% 12.16%
1,784 1587.12 196.88 196.88 38761.73 11.04% 11.04%
1,688 1752.75 -64.75 64.75 4192.56 -3.84% 3.84%
1,766 1773.11 -7.11 7.11 50.55 -0.40% 0.40%
1,876 1854.31 21.69 21.69 470.46 1.16% 1.16%
1,906 1892.39 13.61 13.61 185.23 0.71% 0.71%
1,136 1917.81 -781.81 781.81 611226.88 -68.82% 68.82%
1,560 1715.92 -155.92 155.92 24311.05 -9.99% 9.99%
1,715 1612.71 102.29 102.29 10463.24 5.96% 5.96%
SUM 1,531.32 724,728.01 114.08%

AVERAGE 170.1467 80525.3346 12.68%
MAD MSE MAPE
33
Table 4.7 Comparation MAD, MSE, and MAPE
Comparation N=4 N=5 N=6
MAD 210.9546 204.193 170.1467
MSE 93011.3451 95991.124 80525.3346
MAPE 14.73% 12.17% 12.68%
From table 4.7 Comparation MAD, MSE and MAPE show that the lowest values
of error are N=6. So, it is better compared to others and will be continued to the
validation process.
4.2.1.3 Validation
After determining the value of MAD, MSE, and MAPE, the next step, do validation
towards the forecasting method. There two kinds of validation, such as verification
and tracking signal, in this case using tracking signal – Trigg.
4.2.1.3.1 Verification
In order to show the control chart, there are several calculations. First, calculate the
value of (dt'-dt)-(d(t-1)'-d(t-1)) as a value of MRt. After that, find out the value of
MR using the formula below.
∑𝑛
𝑡=2 𝑀𝑅𝑡
MR =
𝑛−1
Find the lower and upper limit of the control chart using formula as below.
UCL = +2.66 ̅̅̅̅̅

𝑀𝑅
̅̅̅̅̅
UCL = +2.66 𝑀𝑅
CL = 0
After the value of MRt, UCL, LCL, and CL are known, now plot the data inline
a graph like in figure 4.3
34
Table 4.8 MR and Control Limit Calculation
dt'-dt d(t-1)'-d(t-1) (dt'-dt)-(d(t-1)'-d(t-1)) |(dt'-dt)-(d(t-1)'-d(t-1))|

-196.88 -187.26 -9.62 9.62
64.75 -196.88 261.63 261.63
7.11 64.75 -57.64 57.64
-21.69 7.11 -28.80 28.8
-13.61 -21.69 8.08 8.08
781.81 -13.61 795.42 795.42
155.92 781.81 -625.89 625.89
-102.29 155.92 -258.21 258.21
MR 255.66125
UCL 680.058925
LCL -680.058925
LCL
MRt UCL 2/3 UCL 1/3 UCL LCL 2/3 1/3 LCL CL
9.62 680.059 453.373 226.686 -680.059 -453.373 -226.686 0
261.63 680.059 453.373 226.686 -680.059 -453.373 -226.686 0
57.64 680.059 453.373 226.686 -680.059 -453.373 -226.686 0
28.8 680.059 453.373 226.686 -680.059 -453.373 -226.686 0
8.08 680.059 453.373 226.686 -680.059 -453.373 -226.686 0
795.42 680.059 453.373 226.686 -680.059 -453.373 -226.686 0
625.89 680.059 453.373 226.686 -680.059 -453.373 -226.686 0
258.21 680.059 453.373 226.686 -680.059 -453.373 -226.686 0
35
DMA Verification Test
1000
500
0
1 2 3 4 5 6 7 8
-500
-1000
MRt UCL 2/3 UCL 1/3 UCL

LCL LCL 2/3 1/3 LCL CL
Figure 4.3 DMA Verification Test
Figure 4.3, shows that the graph is out of control. So it is mean that this method is not good
enough for predicting future demand.
4.2.1.3.2 Tracking Signal

Another method to validate the method is by using the tracking signal Trigg check.
To find out the value of the tracking signal, there are several values should be found
out first. The calculation could be seen in the table below. To find out the value of
MAD, using a previous one. The tracking signal could be found by using the
formula below.
∑𝑛𝑡=1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
(𝑑𝑡 − 𝑑𝑡 ′ )
𝑀𝐴𝐷
After the value of tracking signals in sample data already known, determine the
control limit. The common control limit values is UCL = 1, LCL = -1, and CL = 0.
Plot the data using the line graph, the result is shown in figure 4.4
36
Table 4.10 Tracking Signal – Trigg Calculation
Cum Tracking
period Dt dt’ dt-dt’ |dt-dt’| MAD UCL CL LCL
|dt-dt’| signal
1 1,540 1352.74 187.26 187.26 187.26 187.26 1 1 0 -1
2 1,784 1587.12 196.88 196.88 384.14 192.07 1.03 1 0 -1
3 1,688 1752.75 -64.75 64.75 448.89 149.63 -0.43 1 0 -1
4 1,766 1773.11 -7.11 7.11 456.00 114.00 -0.06 1 0 -1
5 1,876 1854.31 21.69 21.69 477.69 95.54 0.23 1 0 -1
6 1,906 1892.39 13.61 13.61 491.30 81.88 0.17 1 0 -1
-
1,136 1917.81
7 781.81 781.81 1,273.11 181.87 -4.30 1 0 -1
-
1,560 1715.92
8 155.92 155.92 1,429.03 178.63 -0.87 1 0 -1
9 1,715 1612.71 102.29 102.29 1,531.32 170.15 0.60 1 0 -1
DMA Tracking Signal-Trigg

2
0
1 2 3 4 5 6 7 8 9
-1
-2
-3
-4
-5
Tracking signal UCL CL LCL
Figure 4.4 DMA Tracking Signal-Trigg
Figure 4.4, it showed that the graph is out of control. There are two-point out of the
UCL and LCL. So it is mean that this method is not good enough for predicting
future demand. But there is another method to check the tracking signal its tracking
signal-brown method. Control limited of tracking signal-Brown is ±4 to ±6. In this
report use ±4 as an upper limit and lower limit.
∑𝑛𝑡−1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
37
𝑡−1(𝑑𝑡−𝑑𝑡 ) 187.26
𝑡𝑟𝑎𝑐𝑘𝑖𝑛𝑔 𝑠𝑖𝑔𝑛𝑎𝑙 𝑝𝑒𝑟𝑖𝑜𝑑 1 = = = 187.26 = 1
Table 4.11 Tracking Signal Calculation-Brown

Track-
Peri RSFE Cum UC C LC
dt dt' dt-dt' |dt-dt'| MAD ing
od Cum. |dt-dt'| L L L
Signal
1 1,540 1352.74 187.26 187.26 187.26 187.26 187.26 1 4 0 -4
2 1,784 1587.12 196.88 384.14 196.88 384.14 192.07 2.00 4 0 -4
3 1,688 1752.75 -64.75 319.39 64.75 448.89 149.63 2.13 4 0 -4
4 1,766 1773.11 -7.11 312.28 7.11 456 114.00 2.74 4 0 -4
5 1,876 1854.31 21.69 333.97 21.69 477.69 95.54 3.50 4 0 -4
6 1,906 1892.39 13.61 347.58 13.61 491.3 81.88 4.24 4 0 -4
7 1,136 1917.81 -781.81 -434.23 781.81 1273.11 181.87 -2.39 4 0 -4
8 1,560 1715.92 -155.92 -590.15 155.92 1429.03 178.63 -3.30 4 0 -4
9 1,715 1612.71 102.29 -487.86 102.29 1531.32 170.15 -2.87 4 0 -4
DMA Tracking Signal-Brown

5
4
3
2
1
0
-1 1 2 3 4 5 6 7 8 9 10
-2
-3
-4
-5
Tracking Signal UCL CL LCL
Figure 4.5 DMA Tracking Signal-Brown
From the figure 4.5, it showed that the graph is out of control. Since the out of
control is one point, it is slightly passed the verification test. So using two methods
of tracking signal. Can conclude both of them are slightly passed.
38
4.2.2 Double Exponential Smoothing-Browns
In the exponential smoothing method, not only a single exponential smoothing
(SES) but there is also double exponential smoothing. It is an improvement of
Simple Exponential Smoothing (SES) which does the exponential filter processed
twice. Double exponential smoothing (DES) divided into two methods. its Brown
Method and Holt Method. In this section, the demand will be forecasted by using
the Brown Method.

Here, there are different kinds of a number of time periods included in coefficient
factor (α), such as 0.2, 0.4, and 0.6. The smallest error will be chosen to be validated.
In order to find the value of forecasting demand for α = 0.2, first calculate the single
smoothed series by using this formula below:
St’ = 𝛼. 𝑑𝑡 + (1 − 𝛼) 𝑆𝑡−1 ′
St2’ = 0.2 𝑥 1674 + (1 − 0.2) 1620
= 1630.8
In this method, the first single-smoothed series, it’s assumed to be the same as the
demand. The first double-smoothed series also assumed to be the same as the
demand. So, the second period’s single-smoothed series and double-smoothed
series and the rest period can be calculated. After the single-smoothed series is
calculated, then the double-smoothed series can be calculated by using this formula
below:
St’’ = 𝛼. 𝑑𝑡′ + (1 − 𝛼) 𝑆𝑡−1 ′′

St2’’= 0.2 𝑥 1630.8 + (1 − 0.2) 1620
= 1622.16
After that, the rest period’s also calculated by using this formula in order to find
each at and bt (the coefficient to forecast the demand). The coefficient at and bt can
be calculated by using this formula:
39
at = 2St’ – St’’
2
bt = 1−𝛼 St’ – St’’
For example, the coefficient at and bt in period 2 are :
at = 2 x 1630.8 – 1622.16
= 1639.44
2
bt = 1−0.2 1630.8 – 1622.16
= 2.16
The coefficient of period 2 is used to forecast the demand of period 3 like this:
Ft+m = at + bt . m
= 1639.44 + 2.16 x 1
= 1641.60
The result of forecasting by using DES-Browns method with α= 0.2 can be seen in
the table 4.12:
Table 4.12 DES Browns Forecast Demand (α =0.2)
Month t Dt st' st'' At Bt dt'

Jan 2017 1 1,620 1620.00 1620.00
Feb 2017 2 1,674 1630.80 1622.16 1639.44 2.16 -
Mar 2017 3 1,708 1646.24 1626.98 1665.50 4.82 1641.60
Apr 2017 4 1,782 1673.39 1636.26 1710.52 9.28 1670.32
May 2017 5 1,623 1663.31 1641.67 1684.96 5.41 1719.81
Jun 2017 6 980 1526.65 1618.67 1434.64 -23.00 1690.37
Jul 2017 7 1,322 1485.72 1592.08 1379.36 -26.59 1411.63
Aug 2017 8 1,567 1501.98 1574.06 1429.90 -18.02 1352.78
Sep 2017 9 1,434 1488.38 1556.92 1419.84 -17.14 1411.88
Oct 2017 10 1,609 1512.51 1548.04 1476.97 -8.88 1402.71
Nov 2017 11 1,648 1539.60 1546.35 1532.86 -1.69 1468.09
Dec 2017 12 1,540 1539.68 1545.02 1534.35 -1.33 1531.17
Jan 2018 13 1,784 1588.55 1553.72 1623.37 8.71 1533.01
Feb 2018 14 1,688 1608.44 1564.67 1652.21 10.94 1632.08
40
Table 4.12 DES Browns Forecast Demand (α =0.2) (Continued)
Month t Dt st' st'' At Bt dt'

Mar 2018 15 1,766 1639.95 1579.72 1700.18 15.06 1663.15
Apr 2018 16 1,876 1687.16 1601.21 1773.11 21.49 1715.23
May 2018 17 1,906 1730.93 1627.15 1834.70 25.94 1794.60
Jun 2018 18 1,136 1611.94 1624.11 1599.77 -3.04 1860.65
Jul 2018 19 1,560 1601.55 1619.60 1583.51 -4.51 1596.73
Aug 2018 20 1,715 1624.24 1620.53 1627.96 0.93 1579.00
Sep 2018 21 1628.89
Oct 2018 22 1629.81
Nov 2018 23 1630.74
Dec 2018 24 1631.672
Jan 2019 25 1632.601
Feb 2019 26 1633.529
To find the value of forecasting demand for α = 0.4 and 0.6 by using the formula
like the previous forecasting that used α = 0.2. So for the result of forecasting
demand for α = 0.4 can see in table 4.13 and the result of forecasting demand for α
= 0.6 can see in table 4.14.
Month T dt st' st'' at Bt dt'

Jan 2017 1 1,620 1,620 1620.00
Feb 2017 2 1,674 1641.6 1628.64 1654.56 8.64 -
Mar 2017 3 1,708 1668.16 1644.45 1691.87 15.81 1663.2
Apr 2017 4 1,782 1713.696 1672.15 1755.24 27.70 1707.68
May 2017 5 1,623 1677.418 1674.26 1680.58 2.11 1782.944
Jun 2017 6 980 1398.451 1563.93 1232.97 -110.32 1682.688
Jul 2017 7 1,322 1367.87 1485.51 1250.23 -78.43 1122.646
Aug 2017 8 1,567 1447.522 1470.31 1424.73 -15.19 1171.807
Sep 2017 9 1,434 1442.113 1459.03 1425.19 -11.28 1409.536
Oct 2017 10 1,609 1508.868 1478.97 1538.77 19.93 1413.913
Nov 2017 11 1,648 1564.521 1513.19 1615.85 34.22 1558.702
Dec 2017 12 1,540 1554.712 1529.80 1579.63 16.61 1650.074
Jan 2018 13 1,784 1646.427 1576.45 1716.41 46.65 1596.236
Feb 2018 14 1,688 1663.056 1611.09 1715.02 34.64 1763.057
41
Table 4.13 DES Browns Forecast Demand (α =0.4) (Continued)

Mar 2018 15 1,766 1704.234 1648.35 1760.12 37.26 1749.663
Apr 2018 16 1,876 1772.94 1698.19 1847.70 49.84 1797.375
May 2018 17 1,906 1826.164 1749.38 1902.95 51.19 1897.532
Jun 2018 18 1,136 1550.099 1669.67 1430.53 -79.71 1954.143
Jul 2018 19 1,560 1554.059 1623.42 1484.70 -46.24 1350.82
Aug 2018 20 1,715 1618.435 1621.43 1615.44 -2.00 1438.453
Sep 2018 21 1613.448
Oct 2018 22 1611.453
Nov 2018 23 1609.458
Dec 2018 24 1607.463
Jan 2019 25 1605.468
Feb 2019 26 1603.473

Jan 2017 1 1,620 1620 1,620
Feb 2017 2 1,674 1652.4 1639.44 1665.36 19.44
Mar 2017 3 1,708 1694.4 1672.416 1716.384 32.976 1684.8
Apr 2017 4 1,782 1752.4 1720.406 1784.394 47.9904 1749.36
May 2017 5 1,623 1686.6 1700.123 1673.077 -20.2838 1832.384
Jun 2017 6 980 1237.2 1422.369 1052.031 -277.754 1652.794
Jul 2017 7 1,322 1185.2 1280.068 1090.332 -142.301 774.2774
Aug 2017 8 1,567 1469 1393.427 1544.573 113.3594 948.031
Sep 2017 9 1,434 1487.2 1449.691 1524.709 56.26377 1657.932
Oct 2017 10 1,609 1539 1503.276 1574.724 53.58551 1580.973
Nov 2017 11 1,648 1632.4 1580.751 1684.049 77.4742 1628.309
Dec 2017 12 1,540 1583.2 1582.22 1584.18 1.469682 1761.524
Jan 2018 13 1,784 1686.4 1644.728 1728.072 62.50787 1585.649
Feb 2018 14 1,688 1726.4 1693.731 1759.069 49.00315 1790.58
Mar 2018 15 1,766 1734.8 1718.372 1751.228 24.64126 1808.072
Apr 2018 16 1,876 1832 1786.549 1877.451 68.1765 1775.869
May 2018 17 1,906 1894 1851.02 1936.98 64.4706 1945.628
Jun 2018 18 1,136 1444 1606.808 1281.192 -244.212 2001.451
Jul 2018 19 1,560 1390.4 1476.963 1303.837 -129.845 1036.98
Aug 2018 20 1,715 1653 1582.585 1723.415 105.6221 1173.992
Sep 2018 21 1829.037
42

Oct 2018 22 1934.659
Nov 2018 23 2040.281
Dec 2018 24 2145.903
Jan 2019 25 2251.525
Feb 2019 26 2357.147

|dt-dt’| should be found out and calculate the average of it. Here is an example of α
= 0.2
∑𝑛 ′
𝑡=1 |𝑑𝑡−𝑑𝑡 | 3285.58
𝑀𝐴𝐷 = = = 182.53
𝑛 20
The second error measurement is MSE. To find the value of MSE, the total value
of (dt-dt’)2 should be found out and calculate the average of it.
∑𝑛 ′ 2
𝑡=1(𝑑𝑡−𝑑𝑡 ) 1320207.97
𝑀𝑆𝐸 = = = 73344.89
𝑛 20
dt−dt’ ∑𝑛
𝑡=1 |𝑃𝐸𝑡| 246.61%
PE1 = x 100% MAPE = = = 13.70%
𝑑𝑡 𝑛 20
43
Table 4.15 MAD, MSE, and MAPE Calculation (α =0.2)
dt dt' dt-dt' |dt-dt’| (dt-dt’)2 Pet |PEt|

1,708 1641.60 66.40 66.40 4408.96 3.89% 3.89%
1,782 1670.32 111.68 111.68 12472.42 6.27% 6.27%
1,623 1719.81 -96.81 96.81 9371.79 -5.96% 5.96%
980 1690.37 -710.37 710.37 504622.70 -72.49% 72.49%
1,322 1411.63 -89.63 89.63 8033.84 -6.78% 6.78%
1,567 1352.78 214.22 214.22 45892.28 13.67% 13.67%
1,434 1411.88 22.12 22.12 489.47 1.54% 1.54%
1,609 1402.71 206.29 206.29 42557.43 12.82% 12.82%
1,648 1468.09 179.91 179.91 32368.28 10.92% 10.92%
1,540 1531.17 8.83 8.83 77.98 0.57% 0.57%
1,784 1533.01 250.99 250.99 62993.57 14.07% 14.07%
1,688 1632.08 55.92 55.92 3127.58 3.31% 3.31%
1,766 1663.15 102.85 102.85 10577.95 5.82% 5.82%
1,876 1715.23 160.77 160.77 25845.95 8.57% 8.57%
1,906 1794.60 111.40 111.40 12410.71 5.84% 5.84%
1,136 1860.65 -724.65 724.65 525110.86 -63.79% 63.79%
1,560 1596.73 -36.73 36.73 1349.14 -2.35% 2.35%
1,715 1579.00 136.00 136.00 18497.06 7.93% 7.93%
SUM TOTAL 3285.58 1320207.97 246.61%
AVERAGE 182.53 73344.89 13.70%
MAD MSE MAPE
44
For α = 0.4 and α = 0.6, the method is the same using the formula of MAD, MSE,
and MAPE in α = 0.2. for the calculation of MAD, MSE, and MAPE with α = 0.4
can see in table 4.16 and α = 0.6 can see in table 4.17
Dt dt' dt-dt' |dt-dt’| (dt-dt’)2 PEt |PEt|

1,708 1663.20 44.80 44.80 2007.04 2.62% 2.62%
1,782 1707.68 74.32 74.32 5523.46 4.17% 4.17%
1,623 1782.94 -159.94 159.94 25582.08 -9.85% 9.85%
980 1682.69 -702.69 702.69 493770.43 -71.70% 71.70%
1,322 1122.65 199.35 199.35 39742.11 15.08% 15.08%
1,567 1171.81 395.19 395.19 156177.32 25.22% 25.22%
1,434 1409.54 24.46 24.46 598.48 1.71% 1.71%
1,609 1413.91 195.09 195.09 38059.00 12.12% 12.12%
1,648 1558.70 89.30 89.30 7974.07 5.42% 5.42%
1,540 1650.07 -110.07 110.07 12116.34 -7.15% 7.15%
1,784 1596.24 187.76 187.76 35255.24 10.52% 10.52%
1,688 1763.06 -75.06 75.06 5633.51 -4.45% 4.45%
1,766 1749.66 16.34 16.34 266.90 0.93% 0.93%
1,876 1797.38 78.62 78.62 6181.85 4.19% 4.19%
1,906 1897.53 8.47 8.47 71.71 0.44% 0.44%
1,136 1954.14 -818.14 818.14 669357.66 -72.02% 72.02%
1,560 1350.82 209.18 209.18 43756.27 13.41% 13.41%
1,715 1438.45 276.55 276.55 76478.47 16.13% 16.13%
SUM 3665.34 1618551.94 277.13%
AVERAGE 203.63 89919.55 15.40%
MAD MSE MAPE
45
dt dt' dt-dt' |dt-dt’| (dt-dt’)2 PEt |PEt|

1,708 1684.80 23.20 23.20 538.24 1.36% 1.36%
1,782 1749.36 32.64 32.64 1065.37 1.83% 1.83%
1,623 1832.38 -209.38 209.38 43841.66 -12.90% 12.90%
980 1652.79 -672.79 672.79 452651.23 -68.65% 68.65%
1,322 774.28 547.72 547.72 300000.00 41.43% 41.43%
1,567 948.03 618.97 618.97 383122.65 39.50% 39.50%
1,434 1657.93 -223.93 223.93 50145.72 -15.62% 15.62%
1,609 1580.97 28.03 28.03 785.52 1.74% 1.74%
1,648 1628.31 19.69 19.69 387.73 1.19% 1.19%
1,540 1761.52 -221.52 221.52 49072.74 -14.38% 14.38%
1,784 1585.65 198.35 198.35 39342.93 11.12% 11.12%
1,688 1790.58 -102.58 102.58 10522.61 -6.08% 6.08%
1,766 1808.07 -42.07 42.07 1770.05 -2.38% 2.38%
1,876 1775.87 100.13 100.13 10026.26 5.34% 5.34%
1,906 1945.63 -39.63 39.63 1570.34 -2.08% 2.08%
1,136 2001.45 -865.45 865.45 749005.44 -76.18% 76.18%
1,560 1036.98 523.02 523.02 273549.50 33.53% 33.53%
1,715 1173.99 541.01 541.01 292689.48 31.55% 31.55%
SUM TOTAL
5010.12 2660087.47 366.86%
AVERAGE
278.34 147782.64 20.38%
MAD MSE MAPE
After all of the error values already calculated, the lowest value of error will be
chosen
Table 4.18 Comparison MAD, MSE, and MAPE
Comparison α= 0,2 α= 0,4 α= 0,6

MAD 182.53 203.63 278.34
MSE 73344.89 89919.55 147782.64
MAPE 13.70% 15.40% 20.38%
Based on the figure above, the alpha (∝ that have the lowest values of error is ∝ =
0.2 Because of it has the lowest error than the other two alpha (∝ , so it is the best
for this method and then it is used to the validation process now.
46
4.2.2.3 Validation
and tracking signal, in this case using two. Its tracking signal – Trigg and tracking
signal-brown.
∑𝑛
𝑡=2 𝑀𝑅𝑡
MR =
𝑛−1
UCL = +2.66 ̅̅̅̅̅

𝑀𝑅
̅̅̅̅̅
UCL = +2.66 𝑀𝑅
CL = 0

-111.68 -66.40 -45.28 45.28
96.81 -111.68 208.49 208.49
710.37 96.81 613.56 613.56
89.63 710.37 -620.74 620.74
-214.22 89.63 -303.86 303.86
-22.12 -214.22 192.10 192.10
-206.29 -22.12 -184.17 184.17
-179.91 -206.29 26.38 26.38
-8.83 -179.91 171.08 171.08
-250.99 -8.83 -242.15 242.15
-55.92 -250.99 195.06 195.06
-102.85 -55.92 -46.92 46.92
-160.77 -102.85 -57.92 57.92
-111.40 -160.77 49.36 49.36
724.65 -111.40 836.05 836.05
47
36.73 724.65 -687.91 687.91
-136.00 36.73 -172.73 172.73
MR 273.75
UCL 728.18
LCL -728.18
MRt UCL 2/3 UCL 1/3 UCL LCL 2/3 LCL 1/3 LCL CL
45.28 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
208.49 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
613.56 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
620.74 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
303.86 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
192.10 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
184.17 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
26.38 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
171.08 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
242.15 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
195.06 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
46.92 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
57.92 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
49.36 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
836.05 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
687.91 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
172.73 728.18 485.45 242.73 -728.18 -485.453 -242.726 0
48
After the value of MRt, UCL, LCL, and CL are known, now plot the data inline a
graph like in figure 4.6
DES Brown Verification Test

1000.00
800.00
600.00
400.00
200.00
0.00
-200.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
-400.00
-600.00
-800.00
-1000.00

LCL 2/3 LCL 1/3 LCL CL
Figure 4.6 DES-Brown Verification Test
MAD, using a previous one. The tracking signal could be found by using the
formula below.
∑𝑛𝑡=1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
(𝑑𝑡−𝑑𝑡 ′ ) 66.40
𝑇𝑟𝑎𝑐𝑘𝑖𝑛𝑔 𝑠𝑖𝑔𝑛𝑎𝑙 = = =1
𝑀𝐴𝐷 66.40
49
Table 4.22 Tracking Signal Calculation-Trigg
Cum Tracking
Period Dt dt’ dt-dt’ |dt-dt’| MAD UCL CL LCL
|dt-dt’| signal
1 1,708 1641.60 66.40 66.40 66.40 66.40 1.00 1 0 -1
2 1,782 1670.32 111.68 111.68 178.08 55.84 2.00 1 0 -1
3 1,623 1719.81 -96.81 96.81 274.89 32.27 -3.00 1 0 -1
-
4 980 1690.37
710.37 710.37 985.26 177.59 -4.00 1 0 -1
5 1,322 1411.63 -89.63 89.63 1074.89 17.93 -5.00 1 0 -1
6 1,567 1352.78 214.22 214.22 1289.11 35.70 6.00 1 0 -1
7 1,434 1411.88 22.12 22.12 1311.24 3.16 7.00 1 0 -1
8 1,609 1402.71 206.29 206.29 1517.53 25.79 8.00 1 0 -1
9 1,648 1468.09 179.91 179.91 1697.44 19.99 9.00 1 0 -1
10 1,540 1531.17 8.83 8.83 1706.27 0.88 10.00 1 0 -1
11 1,784 1533.01 250.99 250.99 1957.26 22.82 11.00 1 0 -1
12 1,688 1632.08 55.92 55.92 2013.18 4.66 12.00 1 0 -1
13 1,766 1663.15 102.85 102.85 2116.03 7.91 13.00 1 0 -1
14 1,876 1715.23 160.77 160.77 2276.80 11.48 14.00 1 0 -1
15 1,906 1794.60 111.40 111.40 2388.20 7.43 15.00 1 0 -1
-
16 1,136 1860.65
724.65 724.65 3112.85 45.29 -16.00 1 0 -1
17 1,560 1596.73 -36.73 36.73 3149.58 2.16 -17.00 1 0 -1
18 1,715 1579.00 136.00 136.00 3285.58 7.56 18.00 1 0 -1
DES Brown tracking Signal (Trigg)

20
15
10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
-5
-10
-15
-20
Figure 4.7 DES Brown Tracking Signal (Trigg)
50
Figure 4.7, it showed that the graph is out of control. It's extremely out of the UCL
and LCL So, it slightly passes the tracking signal test. But there is another method
to check the tracking signal its tracking signal-brown method. Control limited of
tracking signal-Brown is ±4 to ±6. In this report use ±4 as an upper limit and lower
limit.
∑𝑛𝑡−1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
𝑡−1(𝑑𝑡−𝑑𝑡 ) 66.40
𝑡𝑟𝑎𝑐𝑘𝑖𝑛𝑔 𝑠𝑖𝑔𝑛𝑎𝑙 𝑝𝑒𝑟𝑖𝑜𝑑 1 = = = 66.40 = 1
Table 4.23 Tracking Signal Calculation-Brown

Track-
RSFE Cum UC C LC
Period dt dt’ dt-dt’ |dt-dt’| MAD ing
Cum. |dt-dt’| L L L
Signal
1 1,708 1641.6 66.40 66.40 66.4 66.4 66.40 1.00 4 0 -4
2 1,782 1670.32 111.68 178.08 111.68 178.08 89.04 2.00 4 0 -4
3 1,623 1719.81 -96.81 81.27 96.81 274.89 91.63 0.89 4 0 -4
- -
4 980 1690.37 710.37 985.26 246.32 -2.55 4 0
710.37 629.10 -4
-
5 1,322 1411.63 -89.63 89.63 1074.89 214.98 -3.34 4 0
718.73 -4
-
6 1,567 1352.78 214.22 214.22 1289.11 214.85 -2.35 4 0
504.51 -4
-
7 1,434 1411.88 22.12 22.12 1311.23 187.32 -2.58 4 0
482.39 -4
-
8 1,609 1402.71 206.29 206.29 1517.52 189.69 -1.46 4 0
276.10 -4
9 1,648 1468.09 179.91 -96.19 179.91 1697.43 188.60 -0.51 4 0 -4
10 1,540 1531.17 8.83 -87.36 8.83 1706.26 170.63 -0.51 4 0 -4
11 1,784 1533.01 250.99 163.63 250.99 1957.25 177.93 0.92 4 0 -4
12 1,688 1632.08 55.92 219.55 55.92 2013.17 167.76 1.31 4 0 -4
13 1,766 1663.15 102.85 322.40 102.85 2116.02 162.77 1.98 4 0 -4
14 1,876 1715.23 160.77 483.17 160.77 2276.79 162.63 2.97 4 0 -4
15 1,906 1794.6 111.40 594.57 111.40 2388.19 159.21 3.73 4 0 -4
- -
16 1,136 1860.65 724.65 3112.84 194.55 -0.67 4 0
724.65 130.08 -4
-
17 1,560 1596.73 -36.73 36.73 3149.57 185.27 -0.90 4 0
166.81 -4
18 1,715 1579 136.00 -30.81 136.00 3285.57 182.53 -0.17 4 0 -4
51
DES Brown tracking Signal (Brown)
5.00
4.00
3.00
2.00
1.00
0.00
-1.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
-2.00
-3.00
-4.00
-5.00
Figure 4.8 DES Brown Tracking Signal (Brown)
Figure 4.8, it showed that the graph is in control. So, it slightly passes the tracking
signal test.
From two method can conclude that the tracking signal-Brown is better than
Tracking signal-Trigg because in tracking signal-Brown see in figure 4.7 all of point
draw in the center area. There is no point outside the center area.
4.2.3 Double Exponential Smoothing-Holt

In this section, the double exponential smoothing (DES) will be forecasted by using
Holt Method.

In this forecast method, there are two kinds, such DES-Holt by using α = 0.3 γ =
0,5 and α = 0.4 γ = 0.6. In the comparison of error measurement, there will be
chosen the smallest error. In order to get the formula of forecast demand, there are
several things should be calculated first, such as St and bt. How to calculate those
formula as below. Here is the example of calculation with α = 0.3 γ = 0,5.
St = α dt + (1− α)(S𝑡−1 + b𝑡−1)
S2 = 0.3 (1674) + 0.5 (1620 − 54) = 1674
52
b2 = γ (St − St𝑡−1) + (1 − γ)b𝑡−1 = 0.5 (1674 − 1620) + 0.5 (54) = 54
F𝑡+N = St + bt (N) = 1674 + 54 (1) = 1728
To find the forecast demand by using α = 0.3 γ = 0.5, and α = 0.4 γ = 0.6, using
formula like as above. The forecast demand shown in table 4.24
Table 4.24 DES – Holt Forecast Demand

dt (In α = 0.3 γ = 0,5 α = 0.4 γ = 0,6
Month
Units) St bt Ft St bt Ft
17-Jan 1620 1.620,00 54,00 1.620,00 54,00
17-Feb 1674 1.674,00 54,00 1.674,00 54,00
17-Mar 1708 1.722,00 51,00 1.728,00 1.720,00 49,20 1.728,00
17-Apr 1782 1.775,70 52,35 1.773,00 1.774,32 52,27 1.769,20
17-May 1623 1.766,54 21,59 1.828,05 1.745,16 3,41 1.826,59
17-Jun 980 1.545,69 -99,63 1.788,13 1.441,14 -181,05 1.748,57
17-Jul 1322 1.408,84 -118,24 1.446,06 1.284,86 -166,19 1.260,09
17-Aug 1567 1.373,53 -76,78 1.290,61 1.298,00 -58,59 1.118,67
17-Sep 1434 1.337,92 -56,19 1.296,75 1.317,25 -11,89 1.239,41
17-Oct 1609 1.379,91 -7,10 1.281,73 1.426,82 60,99 1.305,36
17-Nov 1648 1.455,37 34,18 1.372,81 1.551,88 99,43 1.487,80
17-Dec 1540 1.504,68 41,75 1.489,55 1.606,79 72,72 1.651,32
18-Jan 1784 1.617,70 77,38 1.546,43 1.721,30 97,80 1.679,51
18-Feb 1688 1.692,96 76,32 1.695,08 1.766,66 66,33 1.819,10
18-Mar 1766 1.768,29 75,83 1.769,28 1.806,20 50,25 1.832,99
18-Apr 1876 1.853,68 80,61 1.844,12 1.864,27 54,95 1.856,45
18-May 1906 1.925,81 76,37 1.934,29 1.913,93 51,77 1.919,22
18-Jun 1136 1.742,32 -53,56 2.002,17 1.633,82 -147,35 1.965,70
18-Jul 1560 1.650,13 -72,87 1.688,76 1.515,88 -129,71 1.486,47
18-Aug 1715 1.618,58 -52,21 1.577,26 1.517,70 -50,79 1.386,17
18-Sep 1.566,37 1.466,92
18-Oct 1.514,15 1.416,13
18-Nov 1.461,94 1.365,34
18-Dec 1.409,73 1.314,55
19-Jan 1.357,53 1,263.75
19-Feb 1,305.32 1.212,96
53
There are three error measurement that are used to evaluate the forecasting method.
First error measurement is MAD. To find the value of MAD, the total value of |dt-
dt’| should be found out and calculate the average of it. Here is the example.
∑𝑛𝑡=1|𝑑𝑡 − 𝑑𝑡′| 3.673,56

MAD = = = 204.09
𝑛 18
Second error measurement is MSE. To find the value of MSE, the total value of (dt
– dtʹ)2 should be found out and calculate the average of it.
𝑛
∑𝑡=1(dt − dt′)2 1.835.716,15
MSE = = = 101.984,23
𝑛 18
Next is third error measurement, which is MAPE. To find the value of MAPE, the
total value of PEt should be found out and calculate its average.
𝑑10 − 𝑑10 ′ 327,27

|PE10 | = ( ) 𝑥 100% = 𝑥 100% = 1.17%
𝑑10 1609
∑𝑛𝑡=1|𝑃𝐸𝑡| 283,32%
𝑀𝐴𝑃𝐸 = = = 15,74%
𝑛 18
For α = 0.4 γ = 0.6, the method is same using the formula of MAD, MSE, and
MAPE. After all of error values already calculated, the lowest value of error will be
chosen.
54
Table 4.25 MAD, MSE, and MAPE (α = 0.3 γ = 0,5)
α = 0.3 γ = 0,5
dt-dt' ldt-dt'l (dt-dt')2 Pet LPEtl
-20,00 20,00 400,00 -1,17% 1,17%
9,00 9,00 81,00 0,51% 0,51%
-205,05 205,05 42.045,50 -12,63% 12,63%
-808,13 808,13 653.070,06 -82,46% 82,46%
-124,06 124,06 15.391,53 -9,38% 9,38%
276,39 276,39 76.392,64 17,64% 17,64%
137,25 137,25 18.838,03 9,57% 9,57%
327,27 327,27 107.102,80 20,34% 20,34%
275,19 275,19 75.727,08 16,70% 16,70%
50,45 50,45 2.545,37 3,28% 3,28%
237,57 237,57 56.439,58 13,32% 13,32%
-7,08 7,08 50,16 -0,42% 0,42%
-3,28 3,28 10,74 -0,19% 0,19%
31,88 31,88 1.016,24 1,70% 1,70%
-28,29 28,29 800,57 -1,48% 1,48%
-866,17 866,17 750.252,78 -76,25% 76,25%
-128,76 128,76 16.579,01 -8,25% 8,25%
137,74 137,74 18.973,06 8,03% 8,03%
-20,00 20,00 400,00 -1,17% 1,17%
SUM TOTAL
-708,09 3.673,56 1.835.716,15 283,32%
AVERAGE
204,09 101.984,23 15,74%
MAD MSE MAPE
Table 4.26 MAD, MSE, and MAPE (α = 0.4 γ = 0,6)

α = 0.4 γ = 0,6
-20,00 20,00 400,00 -1,17% 1,17%
12,80 12,80 163,84 0,72% 0,72%
-203,59 203,59 41.449,70 -12,54% 12,54%
-768,57 768,57 590.692,34 -78,43% 78,43%
61,91 61,91 3.832,43 4,68% 4,68%
448,33 448,33 201.001,67 28,61% 28,61%
194,59 194,59 37.864,36 13,57% 13,57%
303,64 303,64 92.197,23 18,87% 18,87%
55
Table 4.26 MAD, MSE, and MAPE (α = 0.4 γ = 0,6) ) (Continued)
α = 0.4 γ = 0,6
160,20 160,20 25.663,32 9,72% 9,72%
-111,32 111,32 12.391,04 -7,23% 7,23%
104,49 104,49 10.918,77 5,86% 5,86%
-131,10 131,10 17.187,38 -7,77% 7,77%
-66,99 66,99 4.488,01 -3,79% 3,79%
19,55 19,55 382,22 1,04% 1,04%
-13,22 13,22 174,66 -0,69% 0,69%
-829,70 829,70 688.408,41 -73,04% 73,04%
73,53 73,53 5.407,00 4,71% 4,71%
328,83 328,83 108.126,70 19,17% 19,17%
SUM TOTAL
-436,62 3.852,35 1.840.749,08 291,62%
AVERAGE
214,02 102.263,84 16,20%
MAD MSE MAPE
Table 4. 27 MAD, MSE, and MAPE Comparation
α = 0.3 γ = 0.5 α = 0.4 γ = 0.6

MAD 204,09 214,02
MSE 101.984,23 102.263,84
MAPE 15,74% 16,20%
Based on the figure above, the alpha (α) that have the lowest values of error is α
=0.3 γ = 0.5. Because of it has the lowest error than the other alternative, so it is the
best for this method and then it is used to the validation process now.
4.2.3.3 Validation
After determining the value of MAD, MSE, and MAPE, next step, do validation
and tracking signal, in this case using tracking signal-Trigg and tracking signal
Brown.
56
MR using formula as below.
∑𝑛𝑡=1 MRt
MR = = 6613,42
𝑛−1
-9,00 20,00 -29,00 29,00

205,05 -9,00 214,05 214,05
808,13 205,05 603,08 603,08
124,06 808,13 -684,06 684,06
-276,39 124,06 -400,45 400,45
-137,25 -276,39 139,14 139,14
-327,27 -137,25 -190,01 190,01
-275,19 -327,27 52,08 52,08
-50,45 -275,19 224,73 224,73
-237,57 -50,45 -187,12 187,12
7,08 -237,57 244,65 244,65
3,28 7,08 -3,81 3,81
-31,88 3,28 -35,16 35,16
28,29 -31,88 60,17 60,17
866,17 28,29 837,88 837,88
128,76 866,17 -737,41 737,41
-137,74 128,76 -266,50 266,50
MR 6613,42
UCL 17591,70
LCL -17591,70
57
2/3 1/3
MRt UCL 2/3 UCL 1/3 UCL LCL CL
LCL LCL
29 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
214.05 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
603.08 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
684.06 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
400.45 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
139.14 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
190.01 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
52.08 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
224.73 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
187.12 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
244.65 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
3.81 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
35.16 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
60.17 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
837.88 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
737.41 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
266.5 17591.70 11,728 3,909 -17591.70 -11,728 -3,909 0
DES-Holt verification test

20000
15000
10000
5000
0
-5000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
-10000
-15000
-20000

LCL 2/3 LCL 1/3 LCL CL
Figure 4.9 DES Holt Verification Test
From the figure above, it showed that the graph is out of control. Since the out of
control are one points, it is slightly passed the verification test.
58
Other method to validate the method is by using the tracking signal Trigg check.
To find out the value of tracking signal, there are several values should be found
MAD, using previous one. The tracking signal could be found by using formula as
below.
∑𝑛𝑡−1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
(𝑑𝑡 − 𝑑𝑡′) ∑𝑛𝑡=1(dt − dt′) −20

𝑇𝑟𝑎𝑐𝑘𝑖𝑛𝑔 𝑆𝑖𝑔𝑛𝑎𝑙 = = = = −1
𝑀𝐴𝐷 𝑀𝐴𝐷 20
Table 4.30 Tracking signal- Trigg
Cum |dt- Tracking

Period Dt dt’ dt-dt’ |dt-dt’| MAD UCL CL LCL
dt’| signal
1 1,708 1,728.00 -20.00 20.00 20.00 20.00 -1.00 1 0 -1
2 1,782 1,773.00 9.00 9.00 29.00 14.50 0.62 1 0 -1
3 1,623 1,828.05 -205.05 205.05 234.05 78.02 -2.63 1 0 -1
4 980 1,788.13 -808.13 808.13 1042.18 260.55 -3.10 1 0 -1
5 1,322 1,446.06 -124.06 124.06 1166.24 233.25 -0.53 1 0 -1
6 1,567 1,290.61 276.39 276.39 1442.63 240.44 1.15 1 0 -1
7 1,434 1,296.75 137.25 137.25 1579.88 225.70 0.61 1 0 -1
8 1,609 1,281.73 327.27 327.27 1907.15 238.39 1.37 1 0 -1
9 1,648 1,372.81 275.19 275.19 2182.34 242.48 1.13 1 0 -1
10 1,540 1,489.55 50.45 50.45 2232.79 223.28 0.23 1 0 -1
11 1,784 1,546.43 237.57 237.57 2470.36 224.58 1.06 1 0 -1
12 1,688 1,695.08 -7.08 7.08 2477.44 206.45 -0.03 1 0 -1
13 1,766 1,769.28 -3.28 3.28 2480.72 190.82 -0.02 1 0 -1
14 1,876 1,844.12 31.88 31.88 2512.60 179.47 0.18 1 0 -1
15 1,906 1,934.29 -28.29 28.29 2540.89 169.39 -0.17 1 0 -1
16 1,136 2,002.17 -866.17 866.17 3407.06 212.94 -4.07 1 0 -1
17 1,560 1,688.76 -128.76 128.76 3535.82 207.99 -0.62 1 0 -1
18 1,715 1,577.26 137.74 137.74 3673.56 204.09 0.67 1 0 -1
59
Tracking Signal-Trigg
2.00
1.00
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
-1.00
-2.00
-3.00
-4.00
-5.00
Figure 4.10 Tracking signal- Trigg
Figure 4.10, it showed that the graph is out of control. It's extremely out of the UCL
limit.
∑𝑛𝑡−1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
𝑡−1(𝑑𝑡−𝑑𝑡 ) −20
𝑡𝑟𝑎𝑐𝑘𝑖𝑛𝑔 𝑠𝑖𝑔𝑛𝑎𝑙 𝑝𝑒𝑟𝑖𝑜𝑑 1 = = = 20
= −1
60
Table 4.31 Tracking signal- Brown
RSFE Cum Tracking

Period dt dt' dt-dt' |dt-dt'| MAD UCL CL LCL
Cum. |dt-dt'| Signal
1 1,708 1,728.00 -20.00 -20.00 20.00 20.00 20.00 -1 4 0 -4

2 1,782 1,773.00 9.00 -11.00 9.00 29.00 14.50 -0.76 4 0 -4
3 1,623 1,828.05 -205.05 -216.05 205.05 234.05 78.02 -2.77 4 0 -4
-
4 980 1,788.13 -808.13 808.13 1042.18 260.55 -3.93 4 0 -4
1,024.18
-
5 1,322 1,446.06 -124.06 124.06 1166.24 233.25 -4.92 4 0 -4
1,148.24
6 1,567 1,290.61 276.39 -871.85 276.39 1442.63 240.44 -3.63 4 0 -4
7 1,434 1,296.75 137.25 -734.60 137.25 1579.88 225.70 -3.25 4 0 -4
8 1,609 1,281.73 327.27 -407.33 327.27 1907.15 238.39 -1.71 4 0 -4
9 1,648 1,372.81 275.19 -132.14 275.19 2182.34 242.48 -0.54 4 0 -4
10 1,540 1,489.55 50.45 -81.69 50.45 2232.79 223.28 -0.37 4 0 -4
11 1,784 1,546.43 237.57 155.88 237.57 2470.36 224.58 0.69 4 0 -4
12 1,688 1,695.08 -7.08 148.80 7.08 2477.44 206.45 0.72 4 0 -4
13 1,766 1,769.28 -3.28 145.52 3.28 2480.72 190.82 0.76 4 0 -4
14 1,876 1,844.12 31.88 177.40 31.88 2512.60 179.47 0.99 4 0 -4
15 1,906 1,934.29 -28.29 149.11 28.29 2540.89 169.39 0.88 4 0 -4
16 1,136 2,002.17 -866.17 -717.06 866.17 3407.06 212.94 -3.37 4 0 -4
17 1,560 1,688.76 -128.76 -845.82 128.76 3535.82 207.99 -4.07 4 0 -4
18 1,715 1,577.26 137.74 -708.08 137.74 3673.56 204.09 -3.47 4 0 -4
Tracking Signal-Brown
5
4
3
2
1
0
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
-2
-3
-4
-5
-6
Figure 4.11 Tracking signal- Brown
61
Figure 4.14 it showed that the graph is in control. So, it slightly passes the tracking
signal test.
From two method can conclude that all of the methods it slightly passes the tracking
signal test. It means there is no method draw the point in the center area.
4.2.4 Regression Analysis (Cyclic Method)

The cyclic method is one of the regression analyses. The calculation of forecasting
is shown below.
In this case, assumed that N = 4, so the value of radians is 120t.
2𝜋
t = 180t
𝑁
Then, calculate the value as like in the table, and the value of dt’ is calculated by
formula as below
dt’ = a + b cos (180t) + c sin (180t)
62
Table 4.32 Cyclic Forecast Demand
Month T Dt sin(180t) Sin2(180t) Cos(180t) Cos2(180t)
Jan 2017 1 1,620 0.000 0.000 -1 1

Feb 2017 2 1,674 0.000 0.000 1 1
Mar 2017 3 1,708 0.000 0.000 -1 1
Apr 2017 4 1,782 0.000 0.000 1 1
May 2017 5 1,623 0.000 0.000 -1 1
Jun 2017 6 980 0.000 0.000 1 1
Jul 2017 7 1,322 0.000 0.000 -1 1
Aug 2017 8 1,567 0.000 0.000 1 1
Sep 2017 9 1,434 0.000 0.000 -1 1
Oct 2017 10 1,609 0.000 0.000 1 1
Nov 2017 11 1,648 0.000 0.000 -1 1
Dec 2017 12 1,540 0.000 0.000 1 1
Jan 2018 13 1,784 0.000 0.000 -1 1
Feb 2018 14 1,688 0.000 0.000 1 1
Mar 2018 15 1,766 0.000 0.000 -1 1
Apr 2018 16 1,876 0.000 0.000 1 1
May 2018 17 1,906 0.000 0.000 -1 1
Jun 2018 18 1,136 0.000 0.000 1 1
Jul 2018 19 1,560 0.000 0.000 -1 1
Aug 2018 20 1,715 0.000 0.000 1 1
Total 210 31,938 0 0 0 20
Sep 2018 21 0.000 0.000 -1 1

Oct 2018 22 0.000 0.000 1 1
Nov 2018 23 0.000 0.000 -1 1
Dec 2018 24 0.000 0.000 1 1
Jan 2019 25 0.000 0.000 -1 1
Feb 2019 26 0.000 0.000 1 1
63
Table 4.32 Cyclic Forecast Demand (Continued)
Month T Dt sin(180) dt. dt. dt'

cos(180) sin(180t) cos(180t)
Jan 2017 1 1,620 0.000 0.00 -1620 1637.1
Feb 2017 2 1,674 0.000 0.00 1674 1556.7
Mar 2017 3 1,708 0.000 0.00 -1708 1637.1
Apr 2017 4 1,782 0.000 0.00 1782 1556.7
May 2017 5 1,623 0.000 0.00 -1623 1637.1
Jun 2017 6 980 0.000 0.00 980 1556.7
Jul 2017 7 1,322 0.000 0.00 -1322 1637.1
Aug 2017 8 1,567 0.000 0.00 1567 1556.7
Sep 2017 9 1,434 0.000 0.00 -1434 1637.1
Oct 2017 10 1,609 0.000 0.00 1609 1556.7
Nov 2017 11 1,648 0.000 0.00 -1648 1637.1
Dec 2017 12 1,540 0.000 0.00 1540 1556.7
Jan 2018 13 1,784 0.000 0.00 -1784 1637.1
Feb 2018 14 1,688 0.000 0.00 1688 1556.7
Mar 2018 15 1,766 0.000 0.00 -1766 1637.1
Apr 2018 16 1,876 0.000 0.00 1876 1556.7
May 2018 17 1,906 0.000 0.00 -1906 1637.1
Jun 2018 18 1,136 0.000 0.00 1136 1556.7
Jul 2018 19 1,560 0.000 0.00 -1560 1637.1
Aug 2018 20 1,715 0.000 0.00 1715 1556.7
Total 210 31,938 0 0 -804
Sep 2018 21 0.000 1637.1

Oct 2018 22 0.000 1556.7
Nov 2018 23 0.000 1637.1
Dec 2018 24 0.000 1556.7
Jan 2019 25 0.000 1637.1
Feb 2019 26 0.000 1556.7
64
To calculate the value of a, b, and c showed as below.
(1)
𝑛 𝑛
𝑛 2𝜋 2𝜋
∑ 𝑑𝑡 = 𝑎. 𝑛 + 𝑏 ∑ cos ( t) + c ∑ sin ( t)
𝑡=1 𝑁 𝑁
𝑡=1 𝑡=1
𝑛 𝑛
𝑛
∑ 𝑑𝑡 = 𝑎. 20 + 𝑏 ∑ cos(180t) + c ∑ sin(180t)
𝑡=1
𝑡=1 𝑡=1
31938 = 𝑎. 20
(2)
𝑛 2𝜋
∑ 𝑑𝑡 cos ( t)
𝑡=1 𝑁
𝑛
2𝜋
= 𝑎 ∑ cos ( t)
𝑁
𝑡=1
𝑛 𝑛
2𝜋 2𝜋 2𝜋
+ 𝑏 ∑ 𝑐𝑜𝑠 2 ( t) + c ∑ sin ( t) cos ( t)
𝑁 𝑁 𝑁
𝑡=1 𝑡=1
𝑛
∑ 𝑑𝑡 cos(180t)
𝑡=1
𝑛
= 𝑎 ∑ cos(180𝑡)
𝑡=1
𝑛 𝑛
2 (180t)
+ 𝑏 ∑ 𝑐𝑜𝑠 + c ∑ sin(180t) cos(180t)
𝑡=1 𝑡=1
−804 = 𝑏. 20
(3)
𝑛 2𝜋
∑ 𝑑𝑡 sin ( t)
𝑡=1 𝑁
𝑛
2𝜋
= 𝑎 ∑ sin ( t)
𝑁
𝑡=1
𝑛 𝑛
2𝜋 2𝜋 2𝜋
+ 𝑏 ∑ 𝑐𝑜𝑠 ( t) sin ( t) + c ∑ sin ( t)
𝑁 𝑁 𝑁
𝑡=1 𝑡=1
65
𝑛
∑ 𝑑𝑡 sin(180t)
𝑡=1
𝑛
= 𝑎 ∑ sin(180𝑡)
𝑡=1
𝑛 𝑛
+ 𝑏 ∑ 𝑐𝑜𝑠 (180t) sin(180t) + c ∑ sin(180t)

𝑡=1 𝑡=1
0=0
By using a substitute or eliminating the equations above, the values of a, b, and c

could be known.
Table 4.33 The Value of a, b, and c

A 1596.9
B -40.2
C 0

|dt-dt’| should be found out and calculate the average of it.
∑𝑛 ′
𝑡=1 |𝑑𝑡−𝑑𝑡 | 3281.2
𝑀𝐴𝐷 = = = 164.06
𝑛 20
And next find error measurement is MSE. To find the value of MSE, the total value
of (dt - dt’)2 should be found out and calculate the average of it.
∑𝑛 ′ 2
𝑡=1(𝑑𝑡−𝑑𝑡 ) 984083
𝑀𝑆𝐸 = = = 49204.15
𝑛 20
66
dt−dt’ −17.10
PE1 = x 100% = = -1.1%
𝑑𝑡 1,620
|PE1| = 1.1%
|PEt| 233.87%
𝑀𝐴𝑃𝐸 = = = 11.69%
𝑛 20
Table 4.34 MAD, MSE, and MAPE Calculation
Month Dt dt’ dt-dt’ |dt-dt’| (dt-dt’)2 Pet |PEt|

Jan 2017 1,620 1637.1 -17.10 17.10 292.41 -1.1% 1.1%
Feb 2017 1,674 1556.7 117.30 117.30 13759.3 7.0% 7.0%
Mar 2017 1,708 1637.1 70.90 70.90 5026.81 4.2% 4.2%
Apr 2017 1,782 1556.7 225.30 225.30 50760.1 12.6% 12.6%
May 2017 1,623 1637.1 -14.10 14.10 198.81 -0.9% 0.9%
Jun 2017 980 1556.7 -576.70 576.70 332583 -58.8% 58.8%
Jul 2017 1,322 1637.1 -315.10 315.10 99288 -23.8% 23.8%
Aug 2017 1,567 1556.7 10.30 10.30 106.09 0.7% 0.7%
Sep 2017 1,434 1637.1 -203.10 203.10 41249.6 -14.2% 14.2%
Oct 2017 1,609 1556.7 52.30 52.30 2735.29 3.3% 3.3%
Nov 2017 1,648 1637.1 10.90 10.90 118.81 0.7% 0.7%
Dec 2017 1,540 1556.7 -16.70 16.70 278.89 -1.1% 1.1%
Jan 2018 1,784 1637.1 146.90 146.90 21579.6 8.2% 8.2%
Feb 2018 1,688 1556.7 131.30 131.30 17239.7 7.8% 7.8%
Mar 2018 1,766 1637.1 128.90 128.90 16615.2 7.3% 7.3%
Apr 2018 1,876 1556.7 319.30 319.30 101952 17.0% 17.0%
May 2018 1,906 1637.1 268.90 268.90 72307.2 14.1% 14.1%
Jun 2018 1,136 1556.7 -420.70 420.70 176988 -37.0% 37.0%
Jul 2018 1,560 1637.1 -77.10 77.10 5944.41 -4.9% 4.9%
Aug 2018 1,715 1556.7 158.30 158.30 25058.9 9.2% 9.2%
SUM 3281.2 984083 233.87%
AVERAGE 164.06 49204.15 11.69%
MAD MSE MAPE
67
4.2.4.3 Validation
∑𝑛
𝑡=2 𝑀𝑅𝑡
MR =
𝑛−1
UCL = +2.66 ̅̅̅̅̅

𝑀𝑅
UCL = +2.66 ̅̅̅̅̅

𝑀𝑅
CL = 0
68

-117.30 17.10 -134.40 134.4
-70.90 -117.30 46.40 46.40
-225.30 -70.90 -154.40 154.4
14.10 -225.30 239.40 239.40
576.70 14.10 562.60 562.60
315.10 576.70 -261.60 261.6
-10.30 315.10 -325.40 325.4
203.10 -10.30 213.40 213.40
-52.30 203.10 -255.40 255.4
-10.90 -52.30 41.40 41.40
16.70 -10.90 27.60 27.60
-146.90 16.70 -163.60 163.6
-131.30 -146.90 15.60 15.60
-128.90 -131.30 2.40 2.40
-319.30 -128.90 -190.40 190.4
-268.90 -319.30 50.40 50.40
420.70 -268.90 689.60 689.60
77.10 420.70 -343.60 343.6
-158.30 77.10 -235.40 235.4
158.30 -175.40 3953.00
MR 208.053
UCL 553.42
LCL -553.42
69
MRt UCL 2/3 UCL 1/3 UCL LCL LCL 2/3 1/3 LCL CL
134.4 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
46.40 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
154.4 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
239.40 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
562.60 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
261.6 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
325.4 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
213.40 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
255.4 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
41.40 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
27.60 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
163.6 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
15.60 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
2.40 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
190.4 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
50.40 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
689.60 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
343.6 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
235.4 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
3953.00 553.420 368.9467 184.4733 -553.42 -368.947 -184.473 0
Cyclic Verification Test

1000
500
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
-500
-1000

Figure 4.12 Cyclic Verification Test
Figure 4.12, it showed that the graph is out of control. Since the out of control is
one point, it slightly passes the verification test.
70
To find out the value of tracking signal, there are several values should be found
MAD, using previous one. The tracking signal could be found by using the formula
below.
∑𝑛𝑡=1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
(𝑑𝑡 − 𝑑𝑡 ′ )
𝑀𝐴𝐷
Table 4. 37 Tracking Signal Calculation-Trigg
Cum Trackin UC
period dt dt’ dt-dt’ |dt-dt’| MAD CL LCL
|dt-dt’| g signal L
1 1,620 1637.1 -17.1 17.1 17.1 17.1 -1.000 1 0 -1

2 1,674 1556.7 117.3 117.3 134.4 67.2 1.746 1 0 -1
3 1,708 1637.1 70.9 70.9 205.3 68.4333 1.036 1 0 -1
4 1,782 1556.7 225.3 225.3 430.6 107.65 2.093 1 0 -1
5 1,623 1637.1 -14.1 14.1 444.7 88.94 -0.159 1 0 -1
6 980 1556.7 -576.7 576.7 1021.4 170.233 -3.388 1 0 -1
7 1,322 1637.1 -315.1 315.1 1336.5 190.929 -1.650 1 0 -1
8 1,567 1556.7 10.3 10.3 1346.8 168.35 0.061 1 0 -1
9 1,434 1637.1 -203.1 203.1 1549.9 172.211 -1.179 1 0 -1
10 1,609 1556.7 52.3 52.3 1602.2 160.22 0.326 1 0 -1
11 1,648 1637.1 10.9 10.9 1613.1 146.645 0.074 1 0 -1
12 1,540 1556.7 -16.7 16.7 1629.8 135.817 -0.123 1 0 -1
13 1,784 1637.1 146.9 146.9 1776.7 136.669 1.075 1 0 -1
14 1,688 1556.7 131.3 131.3 1908 136.286 0.963 1 0 -1
15 1,766 1637.1 128.9 128.9 2036.9 135.793 0.949 1 0 -1
16 1,876 1556.7 319.3 319.3 2356.2 147.263 2.168 1 0 -1
17 1,906 1637.1 268.9 268.9 2625.1 154.418 1.741 1 0 -1
18 1,136 1556.7 -420.7 420.7 3045.8 169.211 -2.486 1 0 -1
19 1,560 1637.1 -77.1 77.1 3122.9 164.363 -0.469 1 0 -1
20 1,715 1556.7 158.3 158.3 3281.2 164.06 0.965 1 0 -1
71
Clyclic Tracking Signal -Trigg
3.000
2.000
1.000
0.000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-1.000
-2.000
-3.000
-4.000
Figure 4.13 Cyclic Tracking Signal – Trigg
From the figure 4.13, it showed that the graph is out of control. There are several
periods out of UCL and LCL. Since the out of control is nine points, it slightly
passes the tracking signal test. But there is another method to check the tracking
signal its tracking signal-brown method. Control limited of tracking signal-Brown
is ±4 to ±6. In this report use ±4 as an upper limit and lower limit.
∑𝑛𝑡−1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
72
Table 4. 38 Tracking Signal Calculation-Brown
Track-
RSFE Cum
Period dt dt' dt-dt' |dt-dt'| MAD ing UCL CL LCL
Cum. |dt-dt'|
Signal
1 1,620 1637.1 -17.10 -17.10 17.10 17.10 17.10 -1.00 4 0 -4
2 1,674 1556.7 117.30 100.20 117.30 134.40 67.20 1.49 4 0 -4
3 1,708 1637.1 70.90 171.10 70.90 205.30 68.43 2.50 4 0 -4
4 1,782 1556.7 225.30 396.40 225.30 430.60 107.65 3.68 4 0 -4
5 1,623 1637.1 -14.10 382.30 14.10 444.70 88.94 4.30 4 0 -4
- -
6 980 1556.7 576.70 1021.40 170.23 -1.14 4 0 -4
576.70 194.40
- -
7 1,322 1637.1 315.10 1336.50 190.93 -2.67 4 0 -4
315.10 509.50
-
8 1,567 1556.7 10.30 10.30 1346.80 168.35 -2.97 4 0 -4
499.20
- -
9 1,434 1637.1 203.10 1549.90 172.21 -4.08 4 0 -4
203.10 702.30
-
10 1,609 1556.7 52.30 52.30 1602.20 160.22 -4.06 4 0 -4
650.00
-
11 1,648 1637.1 10.90 10.90 1613.10 146.65 -4.36 4 0 -4
639.10
-
12 1,540 1556.7 -16.70 16.70 1629.80 135.82 -4.83 4 0 -4
655.80
-
13 1,784 1637.1 146.90 146.90 1776.70 136.67 -3.72 4 0 -4
508.90
-
14 1,688 1556.7 131.30 131.30 1908.00 136.29 -2.77 4 0 -4
377.60
-
15 1,766 1637.1 128.90 128.90 2036.90 135.79 -1.83 4 0 -4
248.70
16 1,876 1556.7 319.30 70.60 319.30 2356.20 147.26 0.48 4 0 -4
17 1,906 1637.1 268.90 339.50 268.90 2625.10 154.42 2.20 4 0 -4
-
18 1,136 1556.7 -81.20 420.70 3045.80 169.21 -0.48 4 0 -4
420.70
-
19 1,560 1637.1 -77.10 77.10 3122.90 164.36 -0.96 4 0 -4
158.30
20 1,715 1556.7 158.30 0.00 158.30 3281.20 164.06 0.00 4 0 -4
73
Cyclic Method Tracking Signal-Brown
6.00
4.00
2.00
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-2.00
-4.00
-6.00
Track-ing Signal UCL CL LCL
Figure 4.14 Cyclic Tracking Signal-Brown
signal test.
4.2.5 Regression Analysis (Linear Cyclic Method)

Linear Cyclic method is one of regression analysis. The calculation of forecasting
is shown below.
In this case, assumed that N = 6, so the value of radians is 120t.
2𝜋
t = 60t
𝑁
Then, calculate the value as like in the table, and the value of dt’ is calculated by
formula as below
dt’ = a + bt + c cos (60t) + d sin (60t)
74
Table 4.39 Linear Cyclic Forecast Demand
sin(60t).
Month T dt sin(60t) sin2(60t) cos(60t) cos2(60t)
cos(60t)
Jan 2017 1 1,620 0.866 0.75 0.5 0.25 0.433
Feb 2017 2 1,674 0.866 0.750 -0.5 0.25 -0.433
Mar 2017 3 1,708 0.000 0.000 -1 1 0.000
Apr 2017 4 1,782 -0.866 0.750 -0.5 0.25 0.433
May 2017 5 1,623 -0.866 0.750 0.5 0.25 -0.433
Jun 2017 6 980 0.000 0.000 1 1 0.000
Jul 2017 7 1,322 0.866 0.750 0.5 0.25 0.433
Aug 2017 8 1,567 0.866 0.750 -0.5 0.25 -0.433
Sep 2017 9 1,434 0.000 0.000 -1 1 0.000
Oct 2017 10 1,609 -0.866 0.750 -0.5 0.25 0.433
Nov 2017 11 1,648 -0.866 0.750 0.5 0.25 -0.433
Dec 2017 12 1,540 0.000 0.000 1 1 0.000
Jan 2018 13 1,784 0.866 0.750 0.5 0.25 0.433
Feb 2018 14 1,688 0.866 0.750 -0.5 0.25 -0.433
Mar 2018 15 1,766 0.000 0.000 -1 1 0.000
Apr 2018 16 1,876 -0.866 0.750 -0.5 0.25 0.433
May 2018 17 1,906 -0.866 0.750 0.5 0.25 -0.433
Jun 2018 18 1,136 0.000 0.000 1 1 0.000
Jul 2018 19 1,560 0.866 0.750 0.5 0.25 0.433
Aug 2018 20 1,715 0.866 0.750 -0.5 0.25 -0.433
Total 210 31,938 2 11 0 10 0
Sep 2018 21
Oct 2018 22
Nov 2018 23
Dec 2018 24
Jan 2019 25
Feb 2019 26
75
Table 4.39 Linear Cyclic Forecast Demand (Continued)
Month t dt t.sin(60t) t.cos(60t) t.dt t2 dt’
Jan 2017 1 1,620 0.866 0.5 1620 1 1373.26

Feb 2017 2 1,674 1.732 -1 3348 4 1535.693
Mar 2017 3 1,708 0.000 -3 5124 9 1702.394
Apr 2017 4 1,782 -3.464 -2 7128 16 1714.469
May 2017 5 1,623 -4.330 2.5 8115 25 1567.65
Jun 2017 6 980 0.000 6 5880 36 1416.563
Jul 2017 7 1,322 6.062 3.5 9254 49 1420.102
Aug 2017 8 1,567 6.928 -4 12536 64 1582.535
Sep 2017 9 1,434 0.000 -9 12906 81 1749.236
Oct 2017 10 1,609 -8.660 -5 16090 100 1761.311
Nov 2017 11 1,648 -9.526 5.5 18128 121 1614.492
Dec 2017 12 1,540 0.000 12 18480 144 1463.405
Jan 2018 13 1,784 11.258 6.5 23192 169 1466.944
Feb 2018 14 1,688 12.124 -7 23632 196 1629.377
Mar 2018 15 1,766 0.000 -15 26490 225 1796.078
Apr 2018 16 1,876 -13.856 -8 30016 256 1808.153
May 2018 17 1,906 -14.722 8.5 32402 289 1661.334
Jun 2018 18 1,136 0.000 18 20448 324 1510.247
Jul 2018 19 1,560 16.454 9.5 29640 361 1513.786
Aug 2018 20 1,715 17.321 -10 34300 400 1676.219
Total 210 31,938 18 9 338,729 2,870
Sep 2018 21 1842.92

Oct 2018 22 1854.995
Nov 2018 23 1708.176
Dec 2018 24 1557.089
Jan 2019 25 1560.628
Feb 2019 26 1723.061
76
to calculate the value of a, b, and c showed as below
(1)
𝑛 𝑛 𝑛 𝑛
2𝜋 2𝜋
∑ 𝑑𝑡 = 𝑎. 𝑛 + 𝑏 ∑ 𝑡 + 𝑐 ∑ 𝑐𝑜𝑠( t ) + 𝑑 ∑ 𝑠𝑖𝑛( t )
𝑁 𝑁
𝑡=1 𝑡=1 𝑡=1 𝑡=1
𝑛 𝑛 𝑛 𝑛
∑ 𝑑𝑡 = 𝑎. 𝑛 + 𝑏 ∑ 𝑡 + 𝑐 ∑ 𝑐𝑜𝑠(60t ) + 𝑑 ∑ 𝑠𝑖𝑛(60t )
𝑡=1 𝑡=1 𝑡=1 𝑡=1
31,938 = 𝑎. 20 + 𝑏 210 + 𝑑 2
(2)
2
2𝜋 2𝜋
∑ 𝑑𝑡 . 𝑡 = 𝑎. ∑ 𝑡 + 𝑏 ∑ 𝑡 + 𝑐 ∑ 𝑡. 𝑐𝑜𝑠( t ) + 𝑑 ∑ 𝑡. 𝑠𝑖𝑛( t )
𝑁 𝑁
𝑡=1 𝑡=1 𝑡=1 𝑡=1 𝑡=1
2
∑ 𝑑𝑡 . 𝑡 = 𝑎. ∑ 𝑡 + 𝑏 ∑ 𝑡 + 𝑐 ∑ 𝑡. 𝑐𝑜𝑠(60t ) + 𝑑 ∑ 𝑡. 𝑠𝑖𝑛(60t )
𝑡=1 𝑡=1 𝑡=1 𝑡=1 𝑡=1
338,729 = 𝑎. 210 + 𝑏 2780 + 𝑐 9 + 𝑑 18
(3)
𝑛 𝑛 𝑛 𝑛
2𝜋 2𝜋 2𝜋 2𝜋
∑ 𝑑𝑡 . 𝐶𝑜𝑠( t ) = 𝑎. ∑ 𝐶𝑜𝑠( t ) + 𝑏 ∑ 𝑡. 𝐶𝑜𝑠( t ) + 𝑐 ∑ 𝑐𝑜𝑠 2 ( t )
𝑁 𝑁 𝑁 𝑁
𝑡=1 𝑡=1 𝑡=1 𝑡=1
𝑛
2𝜋 2𝜋
+ 𝑑 ∑ 𝑠𝑖𝑛 ( t ) 𝐶𝑜𝑠( t )
𝑁 𝑁
𝑡=1
𝑛 𝑛 𝑛 𝑛
∑ 𝑑𝑡 . 𝐶𝑜𝑠(60t ) = 𝑎. ∑ 𝐶𝑜𝑠(60t ) + 𝑏 ∑ 𝑡. 𝐶𝑜𝑠(60t ) + 𝑐 ∑ 𝑐𝑜𝑠 2 (60t )

𝑡=1 𝑡=1 𝑡=1 𝑡=1
𝑛
+ 𝑑 ∑ 𝑠𝑖𝑛(60t )𝐶𝑜𝑠(60t )
𝑡=1
−1476 = 𝑏 9 + 𝑐 10
77
(4)
𝑛 𝑛 𝑛
2𝜋 2𝜋 2𝜋
∑ 𝑑𝑡 . 𝑆𝑖𝑛( t ) = 𝑎. ∑ 𝑠𝑖𝑛( t ) + 𝑏 ∑ 𝑡. 𝑠𝑖𝑛( t ) +
𝑁 𝑁 𝑁
𝑡=1 𝑡=1 𝑡=1
𝑛 𝑛
2𝜋 2𝜋 2𝜋
+ 𝑐 ∑ 𝑐𝑜𝑠 ( t ) 𝑠𝑖𝑛 ( t ) + 𝑐 ∑ 𝑠𝑖𝑛2 ( t )
𝑁 𝑁 𝑁
𝑡=1 𝑡=1
𝑛 𝑛 𝑛
∑ 𝑑𝑡 . 𝑆𝑖𝑛(60t ) = 𝑎. ∑ 𝑠𝑖𝑛(60t ) + 𝑏 ∑ 𝑡. 𝑠𝑖𝑛(60t ) +

𝑡=1 𝑡=1 𝑡=1
𝑛 𝑛
+ 𝑐 ∑ 𝑐𝑜𝑠(60t )𝑠𝑖𝑛(60t ) + 𝑐 ∑ 𝑠𝑖𝑛2 (60t )

𝑡=1 𝑡=1
2153 = 𝑎 2 + 𝑏 18 + 𝑑 11
By substitute or eliminating the equations above, the values of a, b, c, and d could

be known.
Table 4. 40 The Value of a, b, c, and d

A 1524.347
B 7.807
C -154.626
D -94.202

|dt-dt’| should be found out and calculate the average of it.
∑𝑛 ′
𝑡=1 |𝑑𝑡−𝑑𝑡 | 2818.9
𝑀𝐴𝐷 = = = 140.945
𝑛 20
And next find error measurement is MSE. To find the value of MSE, the total value
of (dt - dt’)2 should be found out and calculate the average of it.
78
∑𝑛 ′ 2
𝑡=1(𝑑𝑡−𝑑𝑡 ) 730710.521
𝑀𝑆𝐸 = = = 36535.526
𝑛 20
dt−dt’ 246.74
PE1 = x 100% =
𝑑𝑡 1,620
|PE1| = 15.23%
|PEt| 200.01%
𝑀𝐴𝑃𝐸 = = = 10%
𝑛 20
Table 4. 41 MAD, MSE, and MAPE Calculation

Month dt dt’ dt-dt’ |dt-dt’| (dt-dt’)2 PEt |PEt|
Jan 2017 1,620 1373.26 246.74 246.74 60880.6276 15.23% 15.23%
Feb 2017 1,674 1535.69 138.31 138.307 19128.8262 8.26% 8.26%
Mar 2017 1,708 1702.39 5.61 5.606 31.427236 0.33% 0.33%
Apr 2017 1,782 1714.47 67.53 67.531 4560.43596 3.79% 3.79%
May 2017 1,623 1567.65 55.35 55.35 3063.6225 3.41% 3.41%
Jun 2017 980 1416.56 -436.56 436.563 190587.253 -44.55% 44.55%
Jul 2017 1,322 1420.1 -98.10 98.102 9624.0024 -7.42% 7.42%
Aug 2017 1,567 1582.54 -15.54 15.535 241.336225 -0.99% 0.99%
Sep 2017 1,434 1749.24 -315.24 315.236 99373.7357 -21.98% 21.98%
Oct 2017 1,609 1761.31 -152.31 152.311 23198.6407 -9.47% 9.47%
Nov 2017 1,648 1614.49 33.51 33.508 1122.78606 2.03% 2.03%
Dec 2017 1,540 1463.41 76.60 76.595 5866.79403 4.97% 4.97%
Jan 2018 1,784 1466.94 317.06 317.056 100524.507 17.77% 17.77%
Feb 2018 1,688 1629.38 58.62 58.623 3436.65613 3.47% 3.47%
Mar 2018 1,766 1796.08 -30.08 30.078 904.686084 -1.70% 1.70%
Apr 2018 1,876 1808.15 67.85 67.847 4603.21541 3.62% 3.62%
May 2018 1,906 1661.33 244.67 244.666 59861.4516 12.84% 12.84%
Jun 2018 1,136 1510.25 -374.25 374.247 140060.817 -32.94% 32.94%
Jul 2018 1,560 1513.79 46.21 46.214 2135.7338 2.96% 2.96%
Aug 2018 1,715 1676.22 38.78 38.781 1503.96596 2.26% 2.26%
SUM 2818.9 730710.521 200.01%
AVERAGE 140.945 36535.526 10.00%
MAD MSE MAPE
79
4.2.5.3 Validation
∑𝑛
𝑡=2 𝑀𝑅𝑡
MR =
𝑛−1
̅̅̅̅̅
UCL = +2.66 𝑀𝑅
UCL = +2.66 ̅̅̅̅̅

𝑀𝑅
CL = 0
80

-138.31 -246.74 108.43 108.43
-5.61 -138.31 132.70 132.70
-67.53 -5.61 -61.93 61.93
-55.35 -67.53 12.18 12.18
436.56 -55.35 491.91 491.91
98.10 436.56 -338.46 338.46
15.54 98.10 -82.57 82.57
315.24 15.54 299.70 299.70
152.31 315.24 -162.93 162.93
-33.51 152.31 -185.82 185.82
-76.60 -33.51 -43.09 43.09
-317.06 -76.60 -240.46 240.46
-58.62 -317.06 258.43 258.43
30.08 -58.62 88.70 88.70
-67.85 30.08 -97.93 97.93
-244.67 -67.85 -176.82 176.82
374.25 -244.67 618.91 618.91
-46.21 374.25 -420.46 420.46
-38.78 -46.21 7.43 7.43
MR 201.519
UCL 536.040
LCL -536.040
81
2/3
MRt UCL 2/3 UCL 1/3 UCL LCL 1/3 LCL CL
LCL
- - -
108.43 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
132.70 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
61.93 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
12.18 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
491.91 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
338.46 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
82.57 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
299.70 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
162.93 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
185.82 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
43.09 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
240.46 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
258.43 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
88.70 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
97.93 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
176.82 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
618.91 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
420.46 536.040 357.360 178.680 536.040 357.360 178.680 0
- - -
7.43 536.040 357.360 178.680 536.040 357.360 178.680 0
82
Cyclic linear verification
800.00
600.00
400.00
200.00
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
-200.00
-400.00
-600.00

Figure 4.15 Cyclic Liner Verification Test
From the figure 4.15 it showed that the graph is out of control. So it is mean that
this method is not good enough for predicting future demand.

out first. The calculation could be seen in table 4. To find out the value of MAD,
using previous one. The tracking signal could be found by using the formula below.
∑𝑛𝑡=1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
(𝑑𝑡 − 𝑑𝑡 ′ )
𝑀𝐴𝐷
83
Table 4. 44 Tracking Signal Calculation-Trigg
Cum |dt- Tracking
period dt dt’ dt-dt’ |dt-dt’| MAD UCL CL LCL
dt’| signal
1 1,620 1373.26 246.74 246.74 246.74 246.740 1 1 0 -1
2 1,674 1535.693 138.31 138.307 385.047 69.154 2 1 0 -1
3 1,708 1702.394 5.61 5.606 390.653 1.869 3 1 0 -1
4 1,782 1714.469 67.53 67.531 458.184 16.883 4 1 0 -1
5 1,623 1567.65 55.35 55.35 513.534 11.070 5 1 0 -1
-
6 980 1416.563 436.563 950.097 72.761 -6 1 0 -1
436.56
7 1,322 1420.102 -98.10 98.102 1048.199 14.015 -7 1 0 -1
8 1,567 1582.535 -15.54 15.535 1063.734 1.942 -8 1 0 -1
-
9 1,434 1749.236 315.236 1378.97 35.026 -9 1 0 -1
315.24
-
10 1,609 1761.311 152.311 1531.281 15.231 -10 1 0 -1
152.31
11 1,648 1614.492 33.51 33.508 1564.789 3.046 11 1 0 -1
12 1,540 1463.405 76.60 76.595 1641.384 6.383 12 1 0 -1
13 1,784 1466.944 317.06 317.056 1958.44 24.389 13 1 0 -1
14 1,688 1629.377 58.62 58.623 2017.063 4.187 14 1 0 -1
15 1,766 1796.078 -30.08 30.078 2047.141 2.005 -15 1 0 -1
16 1,876 1808.153 67.85 67.847 2114.988 4.240 16 1 0 -1
17 1,906 1661.334 244.67 244.666 2359.654 14.392 17 1 0 -1
-
18 1,136 1510.247 374.247 2733.901 20.792 -18 1 0 -1
374.25
19 1,560 1513.786 46.21 46.214 2780.115 2.432 19 1 0 -1
20 1,715 1676.219 38.78 38.781 2818.896 1.939 20 1 0 -1
84
Linear Cyclic Tracking Signal (trigg)
300
250
200
150
100
50
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-50
MAD Tracking Signal UCL CL
Figure 4.16 Linear Cyclic Tracking Signal-Trigg
Figure 4.16 it showed that the graph is out of control. It's extremely out of the UCL
limit.
∑𝑛𝑡−1 |𝑑𝑡 − 𝑑𝑡 ′ |
𝑛
85
Table 4. 45 Tracking Signal Calculation-Brown
Cum Track
Perio Dt - RSFE |dt-
dt dt’ |dt- MAD -ing UCL CL LCL
d dt’ Cum. dt’|
dt’| Signal
1373. 246.7 246.7 246.7 246.7 246.7
1 1,708 1.00 4 0 -4
26 4 4 4 40 4
1535. 138.3 385.0 138.3 385.0 192.5
2 1,782 2.00 4 0 -4
693 1 5 07 47 24
1702. 390.6 390.6 130.2
3 1,623 5.61 5.606 3.00 4 0 -4
394 5 53 18
1714. 458.1 67.53 458.1 114.5
4 980 67.53 4.00 4 0 -4
469 8 1 84 46
1567. 513.5 513.5 102.7
5 1,322 55.35 55.35 5.00 4 0 -4
65 3 34 07
-
1416. 436.5 950.0 158.3
6 1,567 436.5 76.97 0.49 4 0 -4
563 63 97 50
6
1420. 98.10 1048. 149.7
7 1,434 -98.10 -21.13 -0.14 4 0 -4
102 2 199 43
1582. 15.53 1063. 132.9
8 1,609 -15.54 -36.67 -0.28 4 0 -4
535 5 734 67
- -
1749. 315.2 1378. 153.2
9 1,648 315.2 351.9 -2.30 4 0 -4
236 36 970 19
4 0
- -
1761. 152.3 1531. 153.1
10 1,540 152.3 504.2 -3.29 4 0 -4
311 11 281 28
1 1
-
1614. 33.50 1564. 142.2
11 1,784 33.51 470.7 -3.31 4 0 -4
492 8 789 54
1
-
1463. 76.59 1641. 136.7
12 1,688 76.60 394.1 -2.88 4 0 -4
405 5 384 82
1
1466. 317.0 317.0 1958. 150.6
13 1,766 -77.05 -0.51 4 0 -4
944 6 56 440 49
1629. 58.62 2017. 144.0
14 1,876 58.62 -18.43 -0.13 4 0 -4
377 3 063 76
1796. 30.07 2047. 136.4
15 1,906 -30.08 -48.51 -0.36 4 0 -4
078 8 141 76
1808. 67.84 2114. 132.1
16 1,136 67.85 19.34 0.15 4 0 -4
153 7 988 87
1661. 244.6 264.0 244.6 2359. 138.8
17 1,560 1.90 4 0 -4
334 7 0 66 654 03
- -
1510. 374.2 2733. 151.8
18 1,715 374.2 110.2 -0.73 4 0 -4
247 47 901 83
5 4
86
Linear Cyclic Tracking Signal-Brown
6.00
4.00
2.00
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-2.00
-4.00
-6.00
Figure 4.17 Linear Cyclic Tracking Signal-Brown
signal test.
4.3 Compare All Methods and Choose the Best Method
Table 4.46 Comparation MAD, MSE, MAPE, and Validation Test
MAP Verific Tracking Signal

No Method MAD MSE
E ation Trigg Brown
Double Moving 12.68 Not Not Not
1 Average
170.147 80525.3346
% Passed Passed Passed
Double Exponential 13.70 Not Not
2 Smoothing-Brown
182.53 73344.89
% Passed Passed
Passed
Not Not
Double Exponential 15,74 Not
3 Smoothing-Holt
204,09 101.984,23
Regression Analysis- 11.69 Not Not Not

4 Cyclic Method
164.06 49204.15
Regression Analysis- 10.00 Not Not Not
5 Linear Cyclic Method
140.945 36535.526
10.00
Lowest 140.945 36535.526 %
15,74
204,09 101.984,23
Highest %
87
By comparing the error measurement (MAD, MSE, MAPE) between the
forecasting methods, the lowest error is the cyclic method and linear cyclic method.
After pass the error test, there are validation tests. But in validation test cyclic
method and linear cyclic method is not passed the validation test. To check the best
method, there are IIDN testing to check the forecasting methods. There are two
kinds of IIDN tests, such as the normality test and autocorrelation test.
4.3.1 Normality Test

The test is to check the data is already normal or not. There is the null hypothesis
(Ho) that the data is normal and the alternatives hypothesis (H1) is not normal. to
check normality test using Kolmogorov-Smirnov Test.
H0: the data is normal
H1: the data is non-normal
Assumed that α = 0.05, so if the p-value is smaller than 0.05, so reject Ho and the
data is not normal. If larger than 0.05, so accept Ho, and the data is normal.
4.3.1.1 IIDN test for DMA Method
Figure 4.18 Probability Plot of DMA Method
Figure 4.18 it is shown the probability plot of the DMA method. The p-value is
larger than 0.05, so do not reject Ho. It means that the data is normal.
88
4.3.1.2 IIDN test for DES-Brown Method
Figure 4.19 Probability Plot of DES-Brown Method
Figure 4.19 it is shown the probability plot of the DES-Brown method. The p-value
is larger than 0.05, so do not reject Ho. It means that the data is normal.
4.3.1.3 IIDN test for DES-Holt Method
Figure 4.20 Probability Plot of DES-Holt Method
Figure 4.20 it is shown the probability plot of the DES-Holt method. The p-value is
larger than 0.05, so do not reject Ho. It means that the data is normal.
89
4.3.1.4 IIDN test for Regression Analysis-Cyclic Method
Figure 4.21 Probability Plot of Linear Cyclic
From figure 4.21, it is shown the probability plot of cyclic method. The p-value is
less than 0.05, so reject Ho. It means that the data is not normal.
4.3.1.5 IIDN test for Regression Analysis-Linear Cyclic Method
Figure 4.22 Probability Plot of Linear Cyclic
Figure 4.22 it is shown the probability plot of the linear cyclic method. The p-value
is larger than 0.05, so do not reject Ho. It means that the data is normal.
90
4.3.2 Autocorrelation Test
The purpose of the autocorrelation test is to check whether they are the correlation
between data or not (independent). If it is autocorrelation, the data will have the
same sign for some periods. But if it is not autocorrelation, there will be a fast
change in the signs of consecutive residuals.
Autocorrelation fuction for linear cyclic
1.0
0.8
0.6
0.4
Autocorrelation
0.2
0.0
-0.2
-0.4
-0.6
-0.8
-1.0
1 2 3 4 5
Lag
Figure 4. Autocorrelation Function for Cyclic
Figure 4., it showed that the data not independent (correlated with each other). It
can be seen by the blue lines through the red line.
Autocorrelation fuction for linear cyclic

1.0
0.8
0.6
0.4
Autocorrelation
0.2
0.0
-0.2
-0.4
-0.6
-0.8
-1.0
1 2 3 4 5 6 7
Lag
91
Figure 4.20. Autocorrelation Function for Linear Cyclic
Figure 4.21, showed that the data not independent (correlated with each other). It
can be seen by the blue lines through the red line.
92
4.3.3 Comparison IIDN Test For All Methods
Table 4.48 Comparison MAD, MSE, MAPE, Validation Test, and IIDN Test
Tracking Signal IIDN Test
No Method MAD MSE MAPE Verification
Trigg Brown Normality independent
1 Double Moving Average 170.147 80525.335 12.68% Not Passed Not Passed Not Passed Not Passed Not Passed
2 Double Exponential Smoothing-Brown 182.53 73344.89 13.70% Not Passed Not Passed Passed Not Passed Not Passed
3 Double Exponential Smoothing-Holt 204,09 101.984,23 15,74% Not Passed Not Passed Not Passed Passed Not Passed
4 Regression Analysis-Cyclic Method 164.06 49204.15 11.69% Not Passed Not Passed Not Passed Not Passed Not Passed
Regression Analysis-Linear Cyclic
5 140.945 36535.526 10.00% Not Passed Not Passed Not Passed Passed Not Passed
Method
Lowest 140.945 36535.526 10.00%
Highest 204,09 101.984,23 15,74%
Based on the calculation of error (MAD, MSE, MAPE), validation test, and IIDN test, the best method is the linear cyclic method.
Because this method has lowest error and passes IIDN test although not pass the independent test but passes the normality test. So after
deciding the best method, the forecast demand for six months ahead can see in table 4.48
93
4.4 Demand Forecast for Six Months Ahead
Table 4.48 Demand Forecast for Six Months Ahead
Month t Forecast Demand

Sep 2018 21 1842.92
Oct 2018 22 1854.995
Nov 2018 23 1708.176
Dec 2018 24 1557.089
Jan 2019 25 1560.628
Feb 2019 26 1723.061
94
95
CHAPTER V
CONCLUSION
The demand for car toy products over the last 20 months showed seasonal patterns.
It could be seen from the scatterplot between the data. There is high and low demand
that occurred in several months. In this report choose the most appropriate method
to calculate the forecasting demand such as DMA, DES Browns, DES Holt, Cyclic,
and Cyclic Linear. To determine which methods are the best, checking error (MAD,
MSE, MAPE), validation test, and IIDN are conducted. From the comparison of
error measurement, there are two smallest errors is Cyclic and Cyclic Linear and
after that the method should prove it using IIDN test. The results show that
From the analysis,it could be concluded that linear cyclic method as the best method
based on calculation. This method has smallest error, slightly passes the validation
test, and passes the IIDN test, normally distributed (p-value > 0.05) but not
independent. It is recommended used for predicting the forecast demand.
96
REFERENCES
Armstrong, J. S. (2001). principles of forecasting: A handbook for researchers and

practitioners. Kluwer Academic Publishers. Retrieved from
https://otexts.com/fpp2/basic-steps.html
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PRODUCTION PLANNING

AND INVENTORY CONTROL

Raka Dhanendra Wicaksono 004201700030

Jababeka Education Park, Ki Hajar Dewantara Street, Kota Jababeka,

The purpose of this production planning and inventory control assignment is to

1.3 Tools and Equipment

2.1 Principle of Forecasting

a. Forecasts are rarely perfect. Forecasting the future involves uncertainty.

2.2 Characteristics of Good Forecasting

The criteria of a good demand forecasting method are:

2.3 The Basic Step in a Forecasting Task

a. Step 1: Problem definition.

2.5 Forecast Time Horizon

a. Short-term forecasts are needed for the scheduling of personnel, production,

An organization needs to develop a forecasting system that involves several

2.6 Types of Forecasting Methods

2.6.1 Qualitative Forecasting Method

2.6.2 Quantitative Forecasting Method

There is a wide range of quantitative forecasting methods, often developed within

Table 2.1 Types of Forecasting Methods

2.6.2.1 Extrinsic Methods (Causal Approach)

2.6.2.1.1 Simple Linear Regression

One variable denoted x is regarded as the predictor, explanatory, or independent

The assumptions of regression are linearity, independence of errors, normality of

Ŷi= Estimated (or predicted) Y value for observation i

b0 = Estimate of the regression intercept

b1= Estimate of the regression slope

2.6.2.1.2 Multiple Linear Regression

1. Multiple Regression Model with k Independent Variables

2. Multiple Regression Equation with k Independent Variables

𝛽1 = slope of Y with variable 𝑋1, holding variables 𝑋2,𝑋3,...,𝑋𝑘 constant

𝛽2 = slope of Y with variable 𝑋2, holding variables 𝑋1,𝑋3,...,𝑋𝑘 constant

𝛽𝑘 = slope of Y with variable 𝑋𝑘 , holding variables 𝑋1,𝑋2,𝑋3...,𝑋𝑘−1 constant

𝜀𝑖 = random error in Y for observations i

2.6.2.2 Intrinsic Methods (Time Series Approach)

Figure 2.1 Time Series

in the previous period (period t-1).

2.6.2.2.2 Arithmetic Average (Average Methods)

2.6.2.2.3 Single Moving Average (SMA)

2.6.2.2.4 Weighted Moving Average (WMA)

𝐶𝑡−1 𝑑𝑡−1 +𝐶𝑡−2 𝑑𝑡−2 +⋯+𝐶𝑡−𝑁 𝑑𝑡−𝑁 ∑𝑁

2.6.2.2.5 Single Exponential Smoothing (SES)

2.6.2.2.6 Double Moving Average (DMA)

For the double moving average, the procedure is:

2.6.2.2.7 Double Exponential Smoothing (DES) – Browns Method

3. Calculate the component (at)

2.6.2.2.8 Double Exponential Smoothing (DES) – Holt Method

2.6.2.2.10 Regression Analysis

c. The formula for regression analysis cyclic in the following:

2.7.1 Mean Absolute Deviation (MAD) = Mean Absolute Error (MAE)

2.7.2 Mean Squared Error (MSE)

2.7.3 Mean Absolute Percentage Error (MAPE)

2.7.4 Standard Error of Estimate (SEE)

Where, f is degree of freedom (constant = 1, Linier = 2, Cyclical Quadratic = 3,

2.7.5 Mean Error (ME)

2.8 Validation of Forecasting Error

2.8.1 Verification Test

The formula for verification test is shown below:

𝑀𝑅𝑡 = |(𝑑𝑡 ′ − 𝑑𝑡) − (𝑑 ′ 𝑡−1 − 𝑑𝑡−1 )

2.8.2 Tracking Signal test

The formula of tracking signal-brown check in the following:

Table 3.1 Demand for Car Toy

Jan 2017 1,620 Nov 2017 1,648