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Demand

The document provides examples of using exponential smoothing and trend projection methods to forecast demand. It gives the equations for exponential smoothing and trend projection. For each example, it provides the given information, forecasting equation, calculation, and answer. It concludes with an example of calculating the Mean Absolute Deviation (MAD) as a measure of forecast accuracy over five months.

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prince victoriano
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134 views2 pages

Demand

The document provides examples of using exponential smoothing and trend projection methods to forecast demand. It gives the equations for exponential smoothing and trend projection. For each example, it provides the given information, forecasting equation, calculation, and answer. It concludes with an example of calculating the Mean Absolute Deviation (MAD) as a measure of forecast accuracy over five months.

Uploaded by

prince victoriano
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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11. Given an actual demand of 110, a previous forecast value of 120, and an =.

3, the

exponential smoothing forecast for the next period would be ______.

Answer: 117

Forecast (t) = Forecast (t-1) + α*{Actual Demand (t-1) –Forecast (t-1)}, 0≤α≤1.

Forecast = 120 + 0.3*(110-120) = 120 –3 = 117.

12. Given an actual demand of 103, a previous forecast value of 99, and an = .4, the

exponential smoothing forecast for the next period would be _______.

Answer: 100.6

Forecast (t) = Forecast (t-1) + α*{Actual Demand (t-1) –Forecast (t-1)}, 0≤α≤1.

Forecast = 99 + 0.4*(103-99) = 99 +1.6 = 100.6

13. For a given product demand, the time series trend equation is 25 + 3.2 X. What is the

demand forecast for period 10?

Answer: 57

Forecast = 25 + 3.2 x 10 = 57

14. The demands for an item for the 12 months of year 2014 are given below.

The trend projection equation is Y = 148.97 + 2.864T where T is the number of the month. Make

a forecast for June of 2015. (Note that the value of T to be used in the trend equation is 18.

June is the 6th month of 2015.)

Answer: 200.52

The value of T to be used in the trend equation is 18. June is the 6th month of 2015.

Y = 148.97 + 2.864*18 = 200.5


15. A forecasting method has produced the following data over the past 5 months. What

is the MAD?

Answer: 1.2

Sum of absolute errors = 1 + 2 + 2 + 0 + 1 = 6

Number of periods = 5

MAD = 6/5 = 1.2

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