Quantitative forecasting methods in library management

Prof. Dr. Algirdas Budrevicius Vilnius University, Faculty of Communication
Course website: http://www.kf.vu.lt/~albud/progn/Engl

"If you can look into the seeds of time, and say which grain will grow and which will not, speak then unto me. " --William Shakespeare

Quantitative forecasting methods in library management

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‡ "It is far better to foresee even without certainty than not to foresee at all. " ‡ --Henri Poincare in The Foundations of Science, page 129.

Quantitative forecasting methods in library management

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Visual data pattern analysis. Quantitative forecasting methods in library management 4 . Time series forecasting. Forecasting: history and current situation. Forecasting in management. Forecasting in library management. Naive forecasting methods.Course plan ‡ Lecture 1. Qualitative and quantitative forecasting.

Part 2: Practical work with Excel ‡ Lecture 4-5. Forecasting project: analysis of forecasting situations in libraries. Part 2: Practical work with Excel ‡ Lecture 3. Part 1: Forecasting using linear regression.Course plan (continued) ‡ Lecture 2. Errors of forecast. Practical work with Excel ‡ Lecture 6. examples. Part 1: Moving average forecasting method. Trend analysis. Discussions Quantitative forecasting methods in library management 5 .

task solutions: Excel workbooks Quantitative forecasting methods in library management 6 .vu.lt/~albud/progn/Engl ‡ Lectures: PowerPoint presentations ‡ Data.Course materials ‡ Course description: Website http://www.kf. demonstrations.

Book of Changes. ‡ New developments: Neural network based methods Quantitative forecasting methods in library management 7 .g. Astrology. Demographic forecasts ‡ Development of the quantitative methods: middle-to-second part of the 20th century. ‡ 19-20 century.Development of the forecasting technique ‡ Non scientiffic forecasting: e.

Current situation in forecasting ‡ Forecasting is widely used in management now ‡ There exist a well defined set of quantitative forecasting methods that changes very little during last fiew decades ‡ There exists computer software that may be quite simply applied in forecasting ‡ Excel program allows to solve simple forecasting tasks Quantitative forecasting methods in library management 8 .

such as: ‡ ‡ ‡ ‡ Personnel management Resource management Finance management Organizational management Quantitative forecasting methods in library management 9 .Forecasting in management Forecasting is used in various domains of management.

Quantitative forecasting methods in library management 10 .Taxonomy of forecasting methods ‡ Methods: quantitative and qualitative ‡ Qualitative: judgmental (based on expert opinions) and technological (used for long term forecasts) ‡ Quantitative: time series methods and reasoning ‡ Note: only time series methods will be considered in this course.

g. or historical data) ‡ Forecasting method (e. Trend analysis) ‡ Forecast ‡ Error of forecast Quantitative forecasting methods in library management 11 . Moving average.Definition of a forecasting situation ‡ Data (time series.

Quantitative time series based forecasting .

Example: Number of library visitors today was 120. (³The value tomorow will be the same as today´).Naive forecasts NF1 and NF2 ‡ Naive forecasts: (a ³folk forecasting technique´) ‡ NF1. (³The value tomorow will be less (greater) by «10% ´). Forecast NF2 for the next month: Temperature will be 25 degrees (increase of 25%). Forecast NF1 for tomorow: 120. Quantitative forecasting methods in library management 13 . ‡ NF2. Example: Average temperature this month is 20 degrees.

Time-series methods of forecasting ‡ Time series analysis relies on historical data and attempts to project historical patterns into the future ‡ Note: only time series methods will further be considered Quantitative forecasting methods in library management 14 .

) Year 1998 1999 450 2000 440 2001 460 2002 470 2003 465 Numb 420 er Quantitative forecasting methods in library management 15 .Time-series example Number of visitors in a library (in th.

.Recomended form to present data and forecasts: an example Year 1995 1996 .. 2005 (forecast) Quantitative forecasting methods in library management 16 Number of readers Forecast Error .

etc. (also see examples in Excell worksheets) Conclusion: good possibilities to apply forecasting methods.Example of real time series data concerning libraries ‡ ‡ ‡ ‡ ‡ Number of libraries (network) Document stocks Loan of documents Number of users Number of visitors. based on time series analysis Quantitative forecasting methods in library management 17 .

Municipal public libraries in Lithuania in 1991-2002 1700 1600 1500 1400 1300 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 Number of libraries Year Quantitative forecasting methods in library management 18 .00 Year Number of libraries 1991 1662 1992 1569 1993 1521 1994 1514 1995 1506 1996 1484 1997 1473 1998 1459 1999 1447 2000 1448 2001 1427 2002 1400 Source: Statistics of Lithuanian Libraries.Example of data Nework of M i i lP li Li raries i Lit ania in .

9 R2 = 0.1x + 269.995741 Visitors 6000 4000 2000 0 0 1 y = 947.9915 2 Week Forecasted nu ber of isitors: Quantitative forecasting methods in library management   3 4 5 5953 19 . De on trat on Week Number of library vi itors 1 2 3 4 5 6 1063 2369 3159 3964 5001 (by n ert ng nu ber of the week x=6 nto the equat on) 5. Eva uat on (u ng RSQ) 0. P ott ng a hart (XY atter) 3.99 Very good f tt ng Nu ber of brary v tor 8000 1. Add ng a near trend ne Opt on : d p ay equat on 4. Ca u at ng the fore a t 0.Example of forecasting Fore a t ng u ng near trend. Ca u at ng orre at on: S gn ff ant orre at on 2.

irregular variation) Trend (linear) Periodical (cyclical.Patterns of the time-series data A forecasting method should comply with the data pattern. There are 4 basic data patterns: ‡ ‡ ‡ ‡ Horizontal (random. seasonal) Complex (a combination of part or all listed above) Quantitative forecasting methods in 20 library management .

Horizontal pattern Hor zont ( rr r r t ons) Quantitative forecasting methods in library management 21 .

Trend Tr (c s r r ) Quantitative forecasting methods in library management 22 .

Periodical pattern Periodical seasonal Quantitative forecasting methods in library management 23 .

trend and periodical variations Quantitative forecasting methods in library management 24 .Complex pattern Compl pattern incl ing random.

Measuring forecast accuracy What is the accuracy of a particular forecast? How to measure the suitability of a particular forecasting method for a given data set? .

‡ The error can be determined only when actual (future) data are available. that is. in a relative form: e=100% (A-F)/A. ‡ or. Quantitative forecasting methods in library management 26 . ‡ e=A-F.Definition of the forecast error ‡ Error (e) of a forecast is measured as a difference between the actual (A) and forecasted values (F).

various statistical measures may be used. the following measures may be used: ‡ Mean (average) error (ME) ‡ Mean absolute error (MAE) ‡ Mean squared error (MSE) Quantitative forecasting methods in library management 27 .Standard statistical measures to estimate errors (1) ‡To preliminary evaluate a forecast and suitability of a method. In evaluating forecasts obtained by means of the moving average method.

relative) ‡ Mean percentage error (MPE) ‡ Mean absolute percentage error (MAPE) Quantitative forecasting methods in library management 28 .Standard statistical measures to estimate errors (2 .

Statistical measures of goodness of fit In trend analysis the following measures will be used: ‡ The Correlation Coefficient ‡ The Determination Coefficient Quantitative forecasting methods in library management 29 .

R. and a correlation near one indicates a strong linear relationship between the two variables Quantitative forecasting methods in library management 30 . It has a value between ±1 and +1 ‡ A correlation near zero indicates little linear relationship. measure the strength and direction of linear relationships between two variables.The Correlation Coefficient ‡ The correlation coefficient.

with a high value indicating a good fit. R2. measures the percentage of variaion in the dependent variable that is explained by the regression or trend line. Quantitative forecasting methods in library management 31 .The Coefficient of Determination ‡ The coefficient of determination. It has a value between zero and one.

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