Excel Forecast

Excel Forecast

Using the data from Problem 3.1 (page 128) on your book develop three forecasts for 2015 January.

1) A 12-month moving average

2) Exponential smoothing with alpha that corresponds to a 12 month moving average block (see formula 3.26). Initialize by averaging the first 11 months.

3) Winter’s method using Centered MA12 (then you need MA2 because the center of 12 is 6.5). Get alphaHW, betaHW from formulas 3.34 and 3.35, respectively and gammaHW is 0.15.

Forecasting

MGT 509

Forecasting is

like driving your car only by looking at the rear view mirror.

rarely accurate.

however necessary for resource allocation planning.

an art as much as a science.

Forecasting process

Historical Data

Mathematical Model

Forecast of Demand

Human input

Forecast Errors

Actual demand observed

Time Series

Five components

Demand = Level +Trend + Seasonal + Cyclic + Irregular

Multiplicative models

Demand = (Trend)(Seasonal)(Cyclic)(Irregular)

1) Select underlying demand pattern

2) Select the values of parameters inherent in the model

3) Use the model to forecast demand

Short-term forecasts

Winterâ€™s Method

Accuracy measures

Monitoring Bias

Taking corrective action

Inserting Judgement

Integrating judgement

Combined forecasts

For short term forecasts judgmental forecasts can be better than statistical forecasts IF done by domain experts

Even without domain experience combining judgmental and statistical forecasts help

Use equal weights

Revised statistical forecasts

Results are mixed

Judgement should be an input rather than revision

If revision is a must, it must be done by domain experts in a structured way

Looking for a Similar Assignment? Our Experts can help. Use the coupon code SAVE30 to get your first order at 30% off!

Hi there! Click one of our representatives below and we will get back to you as soon as possible.

Chat with us on WhatsApp