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Exercise TimeSeries

This document discusses various time series forecasting models including the naïve approach, simple moving average, weighted moving average, and exponential smoothing. It provides the formulas to calculate forecasts for each model and defines terms like mean absolute deviation (MAD) to evaluate forecast accuracy. The models are applied to forecast demand for Period 6 and evaluate which model provides the best forecast based on the lowest MAD.

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Ezrah Kiel Villez
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124 views1 page

Exercise TimeSeries

This document discusses various time series forecasting models including the naïve approach, simple moving average, weighted moving average, and exponential smoothing. It provides the formulas to calculate forecasts for each model and defines terms like mean absolute deviation (MAD) to evaluate forecast accuracy. The models are applied to forecast demand for Period 6 and evaluate which model provides the best forecast based on the lowest MAD.

Uploaded by

Ezrah Kiel Villez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Time Series Models

1. Forecast the demand for Period 6 using the naïve approach. 4. Forecast demand using exponential smoothing model
2. Forecast the demand for Period 6 using 3-week simple with = 0.4.
moving average model. 5. Calculate the MAD for each of the above
3. Using a weight of 0.5 for the most recent observation, forecasting models.
0.3 for the second most recent, and 0.2 for the third most 6. Which forecasting model would you recommend?
recent, forecast the demand for Period 6 using 3-week Why?
weighted moving average model. 7. What should be the demand forecast for Period 6?

 NAÏVE APPROACH  MEAN ABSOLUTE t  the period whose demand we would like to forecast
Ft  At  1 DEVIATION (MAD) t 1  the period immediately before period t
n
 SIMPLE MOVING AVERAGE  Ai  Fi Ft  the demand forecast for period t
n i 1
MAD  At 1  actual demand for period t-1
 Ai n
Ft  i 1 n  the averaging period
n
Ai  the actual demand for period i
 WEIGHTED MOVING AVERAGE
n Wi  the weight to be multiplied to the actual demand for
Ft   Wi Ai , where 0  Wi  1 and  Wi  1.00
period i
i 1
  the exponential smoothing constant
 EXPONENTIAL SMOOTHING
Ft  Ft  1    At  1  Ft  1  , where 0  1 Ft 1  the demand forecast for period t-1

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