Your manager is trying to determine what forecasting method to use. Based upon the following historical data, calculate the following forecast and specify what procedure you would utilize. Month Actual Demand16226536746871737768.7878108011841285 d. Calculate the exponential smoothing with trend component forecast for periods 2 to 12 using an initial trend forecast (T|) of 1.8, aninitial exponential smoothing forecast (Fj) of 60, an a of 0.30, and a d of 0.30.

Given information Month Actual Demand 1 62 2 65 3 67 4 68 5 71 6 73 7 76 8 78…

Answered: Month Actual Demand 1 62 2 65 3 67 4 68…

Business

Operations Management

Month Actual Demand 1 62 2 65 3 67 4 68 5 71 73 7 76 8. 78 9. 78 10 80 11 84 12 85

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section13.7: Exponential Smoothing Models

Problem 28P: The file P13_28.xlsx contains monthly retail sales of U.S. liquor stores. a. Is seasonality present...

See similar textbooks

Related questions

Q: When to use of a time series forecasting technique, what assumptions are made?

A: The statistic techniques uses statistic on historical data and therefore the variables forecasted.…

Q: Contrast the reactive and proactive approaches to forecasting. Give several examples of types…

A: When one talks of proactive and reactive approaches to forecasting, it basically means that one has…

Q: Your manager is trying to determine what forecasting method to use. Based on the following…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Explain the basic assumptions made when using time series forecasting techniques as opposed to…

A: The Time Series Initial Phase makes a variety of assumptions.

Q: State and explain three methods that are used to determine the accuracy of any given forecasting…

A: To be determined: three methods that are used to determine the accuracy of any given forecasting…

Q: State and describe the steps involved in developing a forecasting system

A: To be determined: the steps involved in developing a forecasting system

Q: Explain the methods that are used to develop the forecasting methodology

A: Forecasting is a continuous activity that the business employs in both the short term and long term.…

Q: outline the steps involved in the forecasting process.

A: Business forecasting refers to the tools and procedures used to forecast business changes such as…

Q: State the assumptions made when using a time series forecasting techniques

A: Numerous estimates are taken in statistical analysis.

Q: Describe the steps used to develop a forecasting sy

A: It is important to develop an effective and robust forecasting system. It is an iterative process…

Q: Briefly describe the steps that are used to develop a forecasting system. Using a forecasting…

A: The development of a forecasting system is a multi-step process that requires careful consideration…

Q: our manager is trying to determine what forecasting method to use. Based upon the following…

A: first we put the value on excel sheet then applying weighted moving average formula which shown in…

Q: Describe when to use of a time series forecasting techniques and what assumption are made?

A: Statistical approaches are used to forecast variables by analysing historical data. Forecasts are…

Q: What is the key difference between weighted moving average, simple moving average and the naive…

A: According on historical data and other pertinent information, forecasting techniques are tools and…

Q: Your manager is trying to determine what forecasting method to use. Based upon the following…

A: In exponential smoothing, the smoothing constant is used to forecast the demand for the next period…

Q: Discuss the methods that are used to develop the forecasting methodology?

A: Forecasting is a continuous process that the business engages in both in the short and long term. It…

Q: Other factors to consider in selecting a forecasting technique

A: Forecasting is used to predict future changes or demand patterns. It involves different approaches…

Q: Define and explain the forecasting technique which places more emphasis on recent values and explain…

A: Forecasting is the process of prediction in which sales demand is estimated using historic…

Q: Explain the six steps involved in a typical forecasting procedure.

A: Forecasting is a technique that enables the creation of informed forecasts by utilising previous…

Q: Write from your understanding the meaning of forecasting, forecasting time horizons, Seven Steps in…

A: Forecasting is a procedure that utilizations verifiable information as contributions to make…

Q: What forecasting tool is most appropriate when closely working with customers dependent on your…

A: CPFR (Collaborative planning, forecasting, and replenishment) is a forecasting tool that is the most…

Q: State and describe the forecasting technique which places more emphasis on recent values and explain…

A: To be determined: the forecasting technique which places more emphasis on recent values and explains…

Q: Explain any forecasting technique. How c you measure the forecast o Give o Yamplo rror?

A: Qualitative forecasting It is a statistical technique to create predictions regarding the longer…

Q: Discuss what is seasonality and how forecast is done using data that has seasonality?

A: Time series analysis describes seasonal patterns as recurrent upward and downward cyclic patterns in…

Q: a. Calculate the simple three-month moving average forecast for periods 4 to 12.

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Concept explainers

Forecasting in Business

Forecasting is the process of predicting the future based on the past and the present data and circumstances. In other words, forecasting is the act of making a detailed analysis of future events based on the decisions made in the past as well as the present. Forecasting plays a very important role in operational management as it helps in planning and decision-making. It is not only important for the success of a business but also contributes to individual growth and success. Many business organizations or companies have failed due to the shortcomings of their forecasting.

Question

Your manager is trying to determine what forecasting method to use. Based upon the following historical data, calculate the following forecast and specify what procedure you would utilize.

Month Actual Demand
1
62
2
65
3
67
4
68
71
73
7
76
8.
78
78
10
80
11
84
12
85

d. Calculate the exponential smoothing with trend component forecast for periods 2 to 12 using an initial trend forecast (T|) of 1.8, an
initial exponential smoothing forecast (Fj) of 60, an a of 0.30, and a d of 0.30.

Leveraging special tenchniques in analyzing historical data to predict future trends. Forecasting covers the methods and types of forecasting and their application to case studies.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.

Similar questions

Under what conditions might a firm use multiple forecasting methods?
The file P13_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars) through credit unions. a. Use these data to forecast consumer revolving credit through credit unions for the next 12 months. Do it in two ways. First, fit an exponential trend to the series. Second, use Holts method with optimized smoothing constants. b. Which of these two methods appears to provide the best forecasts? Answer by comparing their MAPE values.
The Baker Company wants to develop a budget to predict how overhead costs vary with activity levels. Management is trying to decide whether direct labor hours (DLH) or units produced is the better measure of activity for the firm. Monthly data for the preceding 24 months appear in the file P13_40.xlsx. Use regression analysis to determine which measure, DLH or Units (or both), should be used for the budget. How would the regression equation be used to obtain the budget for the firms overhead costs?
The owner of a restaurant in Bloomington, Indiana, has recorded sales data for the past 19 years. He has also recorded data on potentially relevant variables. The data are listed in the file P13_17.xlsx. a. Estimate a simple regression equation involving annual sales (the dependent variable) and the size of the population residing within 10 miles of the restaurant (the explanatory variable). Interpret R-square for this regression. b. Add another explanatory variableannual advertising expendituresto the regression equation in part a. Estimate and interpret this expanded equation. How does the R-square value for this multiple regression equation compare to that of the simple regression equation estimated in part a? Explain any difference between the two R-square values. How can you use the adjusted R-squares for a comparison of the two equations? c. Add one more explanatory variable to the multiple regression equation estimated in part b. In particular, estimate and interpret the coefficients of a multiple regression equation that includes the previous years advertising expenditure. How does the inclusion of this third explanatory variable affect the R-square, compared to the corresponding values for the equation of part b? Explain any changes in this value. What does the adjusted R-square for the new equation tell you?
The file P13_22.xlsx contains total monthly U.S. retail sales data. While holding out the final six months of observations for validation purposes, use the method of moving averages with a carefully chosen span to forecast U.S. retail sales in the next year. Comment on the performance of your model. What makes this time series more challenging to forecast?
The file P13_29.xlsx contains monthly time series data for total U.S. retail sales of building materials (which includes retail sales of building materials, hardware and garden supply stores, and mobile home dealers). a. Is seasonality present in these data? If so, characterize the seasonality pattern. b. Use Winters method to forecast this series with smoothing constants = = 0.1 and = 0.3. Does the forecast series seem to track the seasonal pattern well? What are your forecasts for the next 12 months?
The file P13_26.xlsx contains the monthly number of airline tickets sold by the CareFree Travel Agency. a. Create a time series chart of the data. Based on what you see, which of the exponential smoothing models do you think will provide the best forecasting model? Why? b. Use simple exponential smoothing to forecast these data, using a smoothing constant of 0.1. c. Repeat part b, but search for the smoothing constant that makes RMSE as small as possible. Does it make much of an improvement over the model in part b?
The file P13_28.xlsx contains monthly retail sales of U.S. liquor stores. a. Is seasonality present in these data? If so, characterize the seasonality pattern. b. Use Winters method to forecast this series with smoothing constants = = 0.1 and = 0.3. Does the forecast series seem to track the seasonal pattern well? What are your forecasts for the next 12 months?
The file P13_02.xlsx contains five years of monthly data on sales (number of units sold) for a particular company. The company suspects that except for random noise, its sales are growing by a constant percentage each month and will continue to do so for at least the near future. a. Explain briefly whether the plot of the series visually supports the companys suspicion. b. By what percentage are sales increasing each month? c. What is the MAPE for the forecast model in part b? In words, what does it measure? Considering its magnitude, does the model seem to be doing a good job? d. In words, how does the model make forecasts for future months? Specifically, given the forecast value for the last month in the data set, what simple arithmetic could you use to obtain forecasts for the next few months?
Do the sales prices of houses in a given community vary systematically with their sizes (as measured in square feet)? Answer this question by estimating a simple regression equation where the sales price of the house is the dependent variable, and the size of the house is the explanatory variable. Use the sample data given in P13_06.xlsx. Interpret your estimated equation, the associated R-square value, and the associated standard error of estimate.
Generate forecasts for data with diff erent patterns, such as level, trend, and seasonality and cycles.
a) Apply moving average and exponential smoothing to generate two forecasts of the closing price for the entire data period. Set appropriate values for the forecast parameters (e.g., k and a). b) Plot and compare the actual and predicted data values you calculated in part (b). Provide one chart that displays actual, moving average, and exponential smoothing lines. Hint: Calculate MSE, MAD, or MAPE to compare the different forecasts. Develop your own forecast from scratch. Do NOT use Excel’s Data Analysis or Forecast Sheets.