Demand Absolute

Period t Dt Forecast Ft Error Et Errror At % Error

0
1 2,024.0
2 2,076.0
3 1,992.0
4 2,075.0 2,012.4
5 2,070.0
6 2,046.0
7 2,027.0
8 1,972.0
9 1,912.0
10 1,985.0
2,017.9

α= 0.05
 Data

Quarterly Demand for Tahoe Salt

Period Demand
Year, Qtr t Dt
01,2 1 8,000 Quarterly Demand at Tahoe Salt
01,3 2 13,000
45,000
01,4 3 23,000
40,000
02,1 4 34,000
35,000
02,2 5 10,000
30,000

Demand
02,3 6 18,000
25,000
02,4 7 23,000 20,000
03,1 8 38,000 15,000
03,2 9 12,000 10,000
03,3 10 13,000 5,000
03,4 11 32,000 0
04,1 12 41,000 01,2 01,3 01,4 02,1 02,2 02,3 02,4 03,1

Year, Quarter
 Data

mand at Tahoe Salt

2,1 02,2 02,3 02,4 03,1 03,2 03,3 03,4 04,1

Year, Quarter
 Moving Avg

Period Demand Forecast Error

t Dt Ft Et Absolute Error At % Error MAPEt
45,000
1 8,000 40,000
2 13,000 35,000
3 23,000 30,000
4 34,000 14,667 19,333 19,333 56.86% 63.82% 25,000
5 10,000 23,333 -13,333 13,333 133.33% 20,000
6 18,000 22,333 -4,333 4,333 24.07% 15,000
7 23,000 20,667 2,333 2,333 10.14% 10,000
8 38,000 17,000 21,000 21,000 55.26% 5,000
9 12,000 26,333 -14,333 14,333 119.44% 0
10 13,000 24,333 -11,333 11,333 87.18% 0 2 4 6 8 10 12
11 32,000 21,000 11,000 11,000 34.38%
12 41,000 19,000 22,000 22,000 53.66%
13
14
15
16

0.05

Tahoe Salt Forecasts Using Four-Period Moving Average

 Moving Avg

Demand
Dt
Forecast
Ft

6 8 10 12 14
 Exp Smoo

Absolute Error
Period t Demand Dt Forecast Ft Error Et At MAPEt
0
1 8,000 8,000 0 0 0.00%
2 13,000 8,000 5,000 5,000 38.46%
3 23,000 8,281 14,719 14,719 64.00%
4 34,000 9,107 24,893 24,893 73.22%
5 10,000 10,504 -504 504 5.04%
6 18,000 10,475 7,525 7,525 41.80%
7 23,000 10,898 12,102 12,102 52.62%
8 38,000 11,577 26,423 26,423 69.54%
9 12,000 13,059 -1,059 1,059 8.83%
10 13,000 13,000 0 0 0.00%
45,000
11 32,000 13,000 19,000 19,000 59.38% 40,000
12 41,000 14,066 26,934 26,934 65.69% 35,000
39.88% 30,000
25,000
20,000
α 0.06 15,000
10,000
5,000
Initialization: 0
1 2 3 4 5 6 7 8 9 10 1
a. First forecast (cell C3) can be taken as the first demand
(cell B3)
 Exp Smoo

Demand
Forecast

5 6 7 8 9 10 11 12
 Holt

Period Absolute
t Demand Dt FIT FT Trend Error Et Error At % Error MAPEt
0
1 8,000 13,000 8,000 5,000 -5,000 5,000 62.50% 65.19
2 13,000 15,360 11,680 3,680 -2,360 2,360 18.16%
3 23,000 17,794 14,737 3,057 5,206 5,206 22.63%
4 34,000 23,600 19,168 4,431 10,400 10,400 30.59%
5 10,000 33,522 26,345 7,177 -23,522 23,522 235.22%
6 18,000 28,280 27,313 967 -10,280 10,280 57.11%
7 23,000 23,820 25,566 -1,746 -820 820 3.56%
8 38,000 21,641 23,603 -1,963 16,359 16,359 43.05%
9 12,000 28,315 25,959 2,356 -16,315 16,315 135.96%
10 13,000 22,057 24,008 -1,951 -9,057 9,057 69.67%
11 32,000 15,324 19,666 -4,342 16,676 16,676 52.11%
12 41,000 19,786 19,726 60 21,214 21,214 51.74%

Initialization:
α 0.264
β 1.000 a. First level (cell D3) can be taken as the first demand (cell B3)

b. First trend (cell E3) can be taken as the difference between the first two
demand values (cells B4 and B3)

c. First forecast (cell C4) is sum of the two previous values

 Holt Winter

Period t Demand Dt Forecast Ft Level Trend Season Error Et Abs Error % Error MAPEt
0
1 8,000
2 13,000
3 23,000
4 34,000
5 10,000
6 18,000
7 23,000
8 38,000
9 12,000
10 13,000
11 32,000
12 41,000

Initialization:
α 0.905
β 0.336 a. Seasonal index - 1st Quarter Average/Avg for the entire data
γ 0.350 Level - First Demand (cell B3) dividied by the first index (cell F3)
Trend - Difference of the first two deseasonalide demands (cell B4/cell E4) - (cell B3/cell E3)

b. Use the formula for values in row 4.

c. For year two, use the same seasonal indices while calculating (Note the t-p term). However values need to be updated
for use in year 3 calculations using the formula
 Average of Deseasonalized
Demand Seasonal Deseasonalized
Period t Quarter the Same Forecasted
Dt Factor Demand
Quarter Demand
0
1 1 8,000 10,000 0.45 17,667 18,916
2 2 13,000 14,667 0.66 19,574 19,491
3 3 23,000 26,000 1.18 19,535 20,066
4 4 34,000 37,667 1.71 19,934 20,641
5 1 10,000 0.45 22,083 21,216
6 2 18,000 0.66 27,102 21,791
7 3 23,000 1.18 19,535 22,366
8 4 38,000 1.71 22,279 22,941
9 1 12,000 0.45 26,500 23,516
10 2 13,000 0.66 19,574 24,091
11 3 32,000 1.18 27,179 24,666
12 4 41,000 1.71 24,038 25,241
22,083

Overall
Average SUMMARY OUTPUT

Regression Statistics
Multiple R 0.61766207239783
R Square 0.38150643567878
Adjusted R Square 0.31965707924665
Standard Error 2771.95792156258
Observations 12

ANOVA
df
Regression 1
Residual 10
Total 11

Coefficients
Intercept 18341.2339872517
X Variable 1 575.707591704869
Reseasonalized
Absolute
Forecasted MAPE MAPEt
Error At
Demand
REGRESSION
8,566 566 0.071 8.61% A 18341
12,945 55 0.004 B 575
23,625 625 0.027
35,207 1,207 0.035
50,000
9,607 393 0.039 45,000
14,473 3,527 0.196 40,000
26,333 3,333 0.145 35,000
30,000
39,130 1,130 0.030 Co
25,000 C
10,649 1,351 0.113 20,000
16,000 3,000 0.231 15,000
29,041 2,959 0.092 10,000
5,000
43,053 2,053 0.050 0
1 2 3 4 5 6 7 8 9 10 11 12

25816

SS MS F Significance F
47395810.0539666 47395810.05 6.168317 0.032342
76837507.1891354 7683750.719
124233317.243102

Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0%
Upper 95.0%
1706.02216748555 10.75087671 8.155E-07 14539.98 22142.4882609761 14539.98 22142.49
231.802766398257 2.483609668 0.032342 59.21884 1092.19634151472 59.21884 1092.196
 Column
C

9 10 11 12

Upper 95.0%
Forecast Errors for Tahoe Salt Forecasting

Forecasting Method MAD MAPE(%)

Four-period moving average
Simple exponential smoothing
Holt's model
Regression
 Deseason.
Period Quarter Demand Qtr Avg SF Demand
1I 600 2266.67 0.8155922
2 II 1550 3050.00 1.0974513
3 III 1500 2700.00 0.9715142
4 IV 1500 3100.00 1.1154423
5I 2400 0.8155922
6 II 3100 1.0974513
7 III 2600 0.9715142
8 IV 2900 1.1154423
9I 3800 0.8155922
10 II 4500 1.0974513
11 III 4000 0.9715142
12 IV 4900 1.1154423
2779.16666667
Overall
Average
Deseason. Reseason.
Forecast Forecast Error Abs Err APE

MAPE
A
B