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Forecasting Excel

1) The document compares various forecasting methods including naive, 2-month moving average, weighted moving average, exponential smoothing, and trend line forecasting using historical demand data. 2) It calculates errors and accuracy metrics like mean squared error and mean absolute deviation for different methods using smoothing constants of 0.2 and 0.5 to determine the best fitting model. 3) Exponential smoothing with a smoothing constant of 0.5 performed best with the lowest mean absolute deviation of 4.16.

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Ramainne Ronquillo
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22 views3 pages

Forecasting Excel

1) The document compares various forecasting methods including naive, 2-month moving average, weighted moving average, exponential smoothing, and trend line forecasting using historical demand data. 2) It calculates errors and accuracy metrics like mean squared error and mean absolute deviation for different methods using smoothing constants of 0.2 and 0.5 to determine the best fitting model. 3) Exponential smoothing with a smoothing constant of 0.5 performed best with the lowest mean absolute deviation of 4.16.

Uploaded by

Ramainne Ronquillo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Ronquillo, Ramainne Chalsea L.

April 17, 2020


Sec1/9am-12nn/SAT NRH 105

Given:
Period Demand
Jan 32
Feb 35
Mar 40
Apr 45
May 50

NAÏVE FORECASTING

Period Demand Forecast


Jan 32
Feb 35 32
Mar 40 35
Apr 45 40
May 50 45
June 50

2 month Moving Average Forecast


Moving Average

Period Demand Forecast


Jan 32
Feb 35
Mar 40 33.5
Apr 45 37.5
May 50 42.5
June 47.5

2 Month Weighted Moving Average Forecast


Weighted Moving =
Average
Period Demand Forecast
Jan 32
Feb 35
Mar 40 34.0
Apr 45 38.3
May 50 43.3
June 48.3
MSE - Mean Squared Error using ɑ₁ = 0.20 and ɑ₂ = 0.50
MSE =

Squared Squared
Period Demand Error ɑ₁ = 0.20 Forecast Error ɑ₂ = 0.50 Forecast
Error Error
1 38
2 39 1 1 1 1
3 42 3.8 14.44 3.5 12.25
4 45 6.04 36.48 4.75 22.56
5 50 9.83 96.63 7.38 54.39
6

MSE 37.14 22.55

Trend Line Forecast

Sales
Year (Y) 𝐭^𝟐
Period (t) tY
2011 1 5 1 5
2012 2 8 4 16
2013 3 11 9 33
2014 4 16 16 64
2015 5 20 25 100

b 3.8
a 0.6
equation: Y = 0.6 + 3.8t

Sales
Year (Y)
Period (t)
2016 6 23.4
2017 7 27.2
2018 8 31
2019 9 34.8
Period Demand
1 38
2 39
3 42
4 45
5 50

Exponential Smoothing
ɑ = 0.20

Period Demand Forecast Error


1 38 -
2 39 38 1
3 42 38.2 3.8
4 45 38.96 6.04
5 50 40.17 9.83
6 42.13

MAD - Mean Absolute Deviation using ɑ₁ = 0.20 and ɑ₂ = 0.50

MAD =

ɑ₂ = 0.50
Period Demand Forecast Error
1 38
2 39 38 1
3 42 38.5 3.5
4 45 40.25 4.75
5 50 42.625 7.38
6 46.3125

Period Demand Error ɑ₁ = 0.20 Error ɑ₂ = 0.50


1 38
2 39 1 1
3 42 3.8 3.5
4 45 6.04 4.75
5 50 9.83 7.38
6

MAD = 5.17 4.16

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