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Forecasting Using Minitab

This document provides instructions for using Minitab to perform different forecasting techniques: 1) It explains how to enter time series data and use the moving average technique, noting that the best moving average length is the one with the lowest mean squared deviation (MSD) value. 2) It describes how to perform exponential smoothing and select an alpha value of 0.2 for the example. 3) It outlines how to do regression analysis by entering response and predictor values and interpreting the regression equation and correlation. The document directs the reader to practice these techniques on sample questions.

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512 views

Forecasting Using Minitab

This document provides instructions for using Minitab to perform different forecasting techniques: 1) It explains how to enter time series data and use the moving average technique, noting that the best moving average length is the one with the lowest mean squared deviation (MSD) value. 2) It describes how to perform exponential smoothing and select an alpha value of 0.2 for the example. 3) It outlines how to do regression analysis by entering response and predictor values and interpreting the regression equation and correlation. The document directs the reader to practice these techniques on sample questions.

Uploaded by

sldztrk
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 10

How to solve forecasting problems on Minitab

Enter the data in column

Use the following command:

Chapter 6 Forecasting using Minitab

After entering the value of variable and MA length; click on storage and then on moving average. Take care of the value of MA length; it varies from question to question and even within a question. For this question we are asked to use MA length of 3 and 4 seperately. Let us use 4.

Now check the value of MSD. Check and compare this value when using MA length 3 and 4. Whatever is less is better.

Chapter 6 Forecasting using Minitab

Moving Average Plot for Gasoline forecase


23 22 21
Gasoline forecase
Variable A ctual Fits Mov ing A v erage Length 4 A ccuracy Measures MA PE 15.1132 MA D 2.7188 MSD 9.6484

20 19 18 17 16 15 14 1 2 3 4 5 6 7 Index 8 9 10 11 12

The values of moving average appear in the column next to the data

You are done with the problem. When you use MA lengh of 3, then you will get the following output.

Chapter 6 Forecasting using Minitab

Please note that the last vlaue in the second column (i.e., 19) is the next forecast. Exercise: Please solve question no. 1 and 2. Do these questions manually as well through Minitab and compare the answers from the two methods.

Chapter 6 Forecasting using Minitab

Forecasting using exponential smoothing


Enter the data in column

Use the following command:

Chapter 6 Forecasting using Minitab

Click on options and make following entries:

Chapter 6 Forecasting using Minitab

Followings are the results when you use alpha = 0.2

Please note that the first value in the seecond column (i.e., smoothed data) is the same as the first value in the time series (first column). Exercise: please solve question no. 4 13. The data for the mentnioned queestions has already been provided in a separate excel file. Many of the questions would require comparison of moving average with exponentail smoothing.

Chapter 6 Forecasting using Minitab

Regression analysis
Frist step is data entry. See for instance, question no. 14

Use the following command: stat > regression > regression

Entre the value of response and predictor and then click OK

Chapter 6 Forecasting using Minitab

Here is your answer

Conclusion: Enrollment is decreasing by an average of approximately 351 students per year. If you want to find enrollment for the next year (i.e., year 7), put 7 in the above equation and you will get answer. 90.5% shows that the predictor and response are highly correlated. The next forecast is detemined by putting the value in the above equation.

Chapter 6 Forecasting using Minitab

Exercise: please solve questions no. 14 - 23

Chapter 6 Forecasting using Minitab

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