Basic Principles of Forecasting

Basic Outline for the forecasting:

1. Problem definition

- Be specific

a) Expert opinions

2. Exploratory Analysis

a) Graphical Analysis (Pictures)

b) Descriptive statistics (Mean, Standard deviation, Correlation, Min, Max...)

c) Decomposition analysis (trend, seasonality, cyles, outliers-noise)

Just https://www.wessa.net/rwasp_decomposeloess.wasp#output put data here it will do it automatically graphs of seasonality and trend and cycles etc. Then you have to explain it

3. Model Choice

a) Do the (explicit/implicite) assumptions of the chosen model fit my data?

b) (triple exponential smoothing - multiplicative from the script)

4. Fitting the model

a) Parametrize the model in a way that the historical data is fitted (error measures)

It has to be (triple exponential smoothing - multiplicative from the script) and finding error can be found on excel its you triple smoothing – real data

5. Model Use and Backtesting (Evaluation)

a) Forecasting errors

b) Using SOVLVER in Excel