Forecasting: Time series and trend analysis
Classroom Example. Forecast for period # 8 using the five methods as shown in the tables below.
Find MAD and MAPE for each method. Which method is giving you the best forecast? Why?
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Three period Simple |
Exponential Smoothing |
Naïve |
Method |
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Moving Average |
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Method Alpha = 0.3 |
Forecast=Average Sales |
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Sales |
Forecast Error |
%Error |
Forecast Error |
%Error |
Forecast Error |
%Error |
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Period |
Y |
Y cap |
Y –Y cap |
APE |
Y cap |
Y –Y cap |
APE |
Y cap |
Y –Y cap |
APE |
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1 |
10 |
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----- |
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2 |
14 |
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10 |
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3 |
12 |
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4 |
11 |
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5 |
15 |
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6 |
13 |
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7 |
16 |
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Results |
=== |
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Forecast |
MAD |
MAPE |
Forecast |
MAD |
MAPE |
Forecast |
MAD |
MAPE |
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Trend Analysis |
Naïve |
Method |
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Moving Average |
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Forecast=Last pd Actual |
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Sales |
Forecast Error |
%Error |
Forecast Error |
%Error |
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Period |
Y |
Y cap |
Y –Y cap |
APE |
Y cap |
Y –Y cap |
APE |
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1 |
10 |
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2 |
14 |
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3 |
12 |
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4 |
11 |
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5 |
15 |
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6 |
13 |
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7 |
16 |
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Results |
=== |
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Forecast |
MAD |
MAPE |
Forecast |
MAD |
MAPE |