Professional Documents
Culture Documents
(3rd Edition)
Chapter 7
Demand Forecasting
in a Supply Chain
50,000
40,000
30,000
20,000
10,000
0
,2
,3
,4
,1
,2
,3
,4
,1
,2
,3
,4
,1
97
97
97
98
98
98
98
99
99
99
99
00
© 2007 Pearson Education 7-8
Forecasting Methods
Static
Adaptive
– Moving average
– Simple exponential smoothing
– Holt’s model (with trend)
– Winter’s model (with trend and seasonality)
50,000
40,000
30,000
20,000
10,000
0
,2
,3
,4
,1
,2
,3
,4
,1
,2
,3
,4
,1
97
97
97
98
98
98
98
99
99
99
99
00
© 2007 Pearson Education 7-16
Estimating Level and Trend
Before estimating level and trend, demand data
must be deseasonalized
Deseasonalized demand = demand that would
have been observed in the absence of seasonal
fluctuations
Periodicity (p)
– the number of periods after which the seasonal cycle
repeats itself
– for demand at Tahoe Salt (Table 7.1, Figure 7.1) p = 4
S Di / p for p odd
(sum is from i = t-(p/2) to t+(p/2)), p/2 truncated to lower integer
50000
40000
Demand
30000 Dt
20000 Dt-bar
10000
0
1 2 3 4 5 6 7 8 9 10 11 12
Period