Cabotaje Opman
Cabotaje Opman
Cabotaje Opman
1. Determine the purpose of the forecast- Define the goals of the forecast, including
specific questions to answer and how the results will be used in decision-making.
2. Establish a time horizon- Decide on the forecast's time frame—short-term (up to a
year), medium-term (one to three years), or long-term (three years or more). This choice
affects methods and data collection.
3. Select a forecasting technique- Choose an appropriate forecasting method based on the
purpose, data availability, and required accuracy. Techniques can be qualitative or
quantitative
4. Obtain, clean, and analyze appropriate data- Collect relevant historical data, clean it
to remove inaccuracies, and analyze it to identify patterns and trends. Use visualization
tools for better understanding.
5. Make the forecast- Generate forecasts using the selected model and prepared data.
Document assumptions made during this process, as they impact results.
6. Monitor the forecast- Continuously evaluate forecast accuracy against actual outcomes.
Regular reviews help refine models and improve future forecasting accuracy.
Slope (b):
The slope represents the rate of change of the dependent variable (y) with respect to the
independent variable (x). In simple terms, it tells you how much the dependent variable
increases or decreases as the independent variable changes.
For example, if you're predicting sales based on advertising spend, the slope tells you
how much sales will increase for every additional dollar spent on advertising.
Intercept (a):
The intercept is the value of the dependent variable (y) when the independent variable (x)
is zero. It represents the starting point or baseline value of the dependent variable.
For example, in the same sales prediction, the intercept would represent the baseline sales
when no money is spent on advertising.
Example:
As a sales manager, you have gathered monthly sales data over the past five months and aim to
estimate the trend in sales. The objective is to use this historical data to predict future sales. The
following data represents sales figures for the last five months:
Steps:
10550−9750
b=
275−225
800
b= =16
50
650−16 (15)
a=
5
650−240 410
a= = =82
5 5
5. Final equation:
Slope (b) = 16 y=16 x +82
Intercept (a) = 82
6. Graphing
The actual sales data points (blue dots) show the sales performance for each of the five months.
The regression line (red dashed line) provides the estimated trend in sales, which increases by 16
units per month, reflecting the underlying pattern in the data.
As the sales data points follow a linear increasing trend, the regression line provides a good fit to
predict future sales based on this historical pattern.
TAF t +1=St +T t
TAF t +1 :Trend-Adjusted Forecast for the next period is the sum of:
Components
1. St (Smoothed Error):
Represents the forecast value based on the data, but without considering any
trend. It combines the previous forecast and observed data to "smooth" out
fluctuations.
TAF t : The previous trend-adjusted forecast
At :The actual observed value
( A ¿ ¿ t−TAF t ):¿ The forecast error, which is smoothed using the smoothing constant
α (alpha).
a : A smoothing constant
2. T t (Trend Factor):
Represents the current trend estimate. It adjusts the smoothed forecast by
incorporating the rate at which the data is trending upward or downward.
Example:
You own a coffee shop and are forecasting tomorrow's sales. You already know that sales have
been increasing by 5 cups per day on average. Today's actual sales were 120 cups, and
yesterday's forecast was 100 cups. What is the forecast for tomorrow?
Given:
1. Solve for St
Forecast:
Predicted cups of coffee that will be sold tomorrow is 114 based on the updated baseline and
trend.
Cycles are long-term variations in data caused by external factors, such as economic trends,
industry dynamics, or global events. Unlike seasonal variations, which are predictable within a
year, cycles are irregular and can last years, making them more complex to forecast.
The explanatory approach for forecasting cycles involves identifying a leading variable—a
variable that occurs before the event you're forecasting and is strongly correlated with it. This
allows you to use the leading variable as a predictor for future changes. A leading variable is
something that happens earlier than the variable of interest and is linked to it. Use historical data
to find a strong relationship between the leading variable and the variable of interest. If a high
correlation can be established with a leading variable, it can develop an equation that describes
the relationship, enabling forecasts to be made.
Associative forecasting is a method that uses predictor variables—factors that are known to
influence the variable of interest—to make forecasts. This approach focuses on identifying
cause-and-effect relationships and developing a mathematical equation that predicts the target
variable based on its relationship with the predictors.
Predictor Variables: These are independent variables that influence or predict the
dependent variable (the variable of interest).
Example: Home size (square footage), Property size (lot size), Location, Number of
bedrooms or bathrooms
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