Excersise 7-1: ABC Corporation

Sales
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Total

Year 1
2000
3000
3000
3000
4000
6000
7000
6000
10000
12000
14000
8000
78000

Year 2
3000
4000
3000
5000
5000
8000
3000
8000
12000
12000
16000
10000
89000

Year 3
2000
5000
5000
3000
4000
6000
7000
10000
15000
15000
18000
8000
98000

Year 4
5000
4000
4000
2000
5000
7000
10000
14000
16000
16000
20000
12000
115000

Year 5
5000
2000
3000
2000
7000
6000
8000
10000
20000
20000
22000
8000
113000

p = 12

(even)

Monthly Demand ABC Corporation

25000

20000

15000
Sales

Static Method for Forecasting

10000

Year
Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Month
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC

Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72

CR - 02/27/2015 20:48:09

Dt (based
Demand Deseasonalized
Seasonal
on
Dt
Demand Dt
regression) Factor St Forecast
2000
6068
0.33
0
3000
6138
0.49
0
3000
6208
0.48
0
3000
6278
0.48
0
4000
6348
0.63
0
6000
6419
0.93
0
7000
6542
6489
1.08
0
6000
6625
6559
0.91
0
10000
6667
6629
1.51
0
12000
6750
6700
1.79
0
14000
6875
6770
2.07
0
8000
7000
6840
1.17
0
3000
6917
6910
0.43
0
4000
6833
6981
0.57
0
3000
7000
7051
0.43
0
5000
7083
7121
0.70
0
5000
7167
7191
0.70
0
8000
7333
7262
1.10
0
3000
7375
7332
0.41
0
8000
7375
7402
1.08
0
12000
7500
7472
1.61
0
12000
7500
7543
1.59
0
16000
7375
7613
2.10
0
10000
7250
7683
1.30
0
2000
7333
7753
0.26
0
5000
7583
7824
0.64
0
5000
7792
7894
0.63
0
3000
8042
7964
0.38
0
4000
8250
8034
0.50
0
6000
8250
8105
0.74
0
7000
8292
8175
0.86
0
10000
8375
8245
1.21
0
15000
8292
8315
1.80
0
15000
8208
8386
1.79
0
18000
8208
8456
2.13
0
8000
8292
8526
0.94
0
5000
8458
8596
0.58
0
4000
8750
8667
0.46
0
4000
8958
8737
0.46
0
2000
9042
8807
0.23
0
5000
9167
8877
0.56
0
7000
9417
8948
0.78
0
10000
9583
9018
1.11
0
14000
9500
9088
1.54
0
16000
9375
9158
1.75
0
16000
9333
9229
1.73
0
20000
9417
9299
2.15
0
12000
9458
9369
1.28
0
5000
9333
9439
0.53
0
2000
9083
9510
0.21
0
3000
9083
9580
0.31
3815
2000
9417
9650
0.21
5996
7000
9667
9720
0.72
8110
6000
9583
9791
0.61
8350
8000
9861
0.81
11351
10000
9931
1.01
17210
20000
10001
2.00
17783
20000
10072
1.99
21389
22000
10142
2.17
11102
8000
10212
0.78
0
Forecasts
4879
4789
4150
6519
8814
9069
12322
18671
19282
23179
12025
0

Et
-2000
-3000
-3000
-3000
-4000
-6000
-7000
-6000
-10000
-12000
-14000
-8000
-3000
-4000
-3000
-5000
-5000
-8000
-3000
-8000
-12000
-12000
-16000
-10000
-2000
-5000
-5000
-3000
-4000
-6000
-7000
-10000
-15000
-15000
-18000
-8000
-5000
-4000
-4000
-2000
-5000
-7000
-10000
-14000
-16000
-16000
-20000
-12000
-5000
-2000
815
3996
1110
2350
3351
7210
-2217
1389
-10898
-8000

At
2000
3000
3000
3000
4000
6000
7000
6000
10000
12000
14000
8000
3000
4000
3000
5000
5000
8000
3000
8000
12000
12000
16000
10000
2000
5000
5000
3000
4000
6000
7000
10000
15000
15000
18000
8000
5000
4000
4000
2000
5000
7000
10000
14000
16000
16000
20000
12000
5000
2000
815
3996
1110
2350
3351
7210
2217
1389
10898
8000

bias
-2000
-5000
-8000
-11000
-15000
-21000
-28000
-34000
-44000
-56000
-70000
-78000
-81000
-85000
-88000
-93000
-98000
-106000
-109000
-117000
-129000
-141000
-157000
-167000
-169000
-174000
-179000
-182000
-186000
-192000
-199000
-209000
-224000
-239000
-257000
-265000
-270000
-274000
-278000
-280000
-285000
-292000
-302000
-316000
-332000
-348000
-368000
-380000
-385000
-387000
-386185
-382190
-381079
-378729
-375378
-368167
-370384
-368995
-379893
-387893

MSE
4000000
6500000
7333333
7750000
9400000
13833333
18857143
21000000
29777778
41200000
55272727
56000000
52384615
49785714
47066667
45687500
44470588
45555556
43631579
44650000
49380952
53681818
62478261
64041667
61640000
60230769
58925926
57142857
55724138
55066667
54870968
56281250
61393939
66205882
73571429
73305556
72000000
70526316
69128205
67500000
66463415
66047619
66837209
69772727
73911111
77869565
84723404
85958333
84714286
83100000
81483602
80223644
78733257
77377517
76174853
75742996
74500397
73249158
74020492
73853484

Estimate of standard deviation of forecast error:

MAD
2000
2500
2667
2750
3000
3500
4000
4250
4889
5600
6364
6500
6231
6071
5867
5813
5765
5889
5737
5850
6143
6409
6826
6958
6760
6692
6630
6500
6414
6400
6419
6531
6788
7029
7343
7361
7297
7211
7128
7000
6951
6952
7023
7182
7378
7565
7830
7917
7857
7740
7604
7535
7414
7320
7248
7247
7159
7059
7124
7139
8924

Percent
Error
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
27
200
16
39
42
72
11
7
50
100

MAPE
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
99
101
99
98
97
96
95
93
93
93

TS
-1.00
-2.00
-3.00
-4.00
-5.00
-6.00
-7.00
-8.00
-9.00
-10.00
-11.00
-12.00
-13.00
-14.00
-15.00
-16.00
-17.00
-18.00
-19.00
-20.00
-21.00
-22.00
-23.00
-24.00
-25.00
-26.00
-27.00
-28.00
-29.00
-30.00
-31.00
-32.00
-33.00
-34.00
-35.00
-36.00
-37.00
-38.00
-39.00
-40.00
-41.00
-42.00
-43.00
-44.00
-45.00
-46.00
-47.00
-48.00
-49.00
-50.00
-50.79
-50.72
-51.40
-51.74
-51.79
-50.80
-51.74
-52.27
-53.32
-54.33

5000

Month

Deseasonalized Demand Regression

SUMMARY OUTPUT
Regression Statistics
Multiple R
0.974926
R Square
0.95048
Adjusted R Square
0.949403
Standard Error
226.9015
Observations
48
ANOVA
df
Regression
Residual
Total

SS
MS
F Significance F
1 45456340 45456340 882.9169 1.14E-031
46 2368277 51484.28
47 47824617

Intercept
X Variable 1

Coefficients
Standard Error t Stat
P-value Lower 95%Upper 95%
Lower 95.0%
Upper 95.0%
5997.261 79.19341 75.72929 6.13E-050 5837.853 6156.668 5837.853 6156.668
70.24578 2.36407 29.71392 1.14E-031 65.48716 75.00441 65.48716 75.00441

Seasonal Factors
Month
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC

Average - Seasonal Factor St

0.426609
0.474546
0.462623
0.3982
0.621315
0.834385
0.852882
1.151154
1.733
1.778078
2.123682
1.09472

Bias
0
-50000
-100000
-150000
-200000
bias
-250000
-300000
-350000
-400000
-450000
Period

261895368.xlsx - Values

Excersise 7-1: ABC Corporation

Sales
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Total

Year 1
2000
3000
3000
3000
4000
6000
7000
6000
10000
12000
14000
8000
78000

Year 2
3000
4000
3000
5000
5000
8000
3000
8000
12000
12000
16000
10000
89000

Year 3
2000
5000
5000
3000
4000
6000
7000
10000
15000
15000
18000
8000
98000

Year 4
5000
4000
4000
2000
5000
7000
10000
14000
16000
16000
20000
12000
115000

Year 5
5000
2000
3000
2000
7000
6000
8000
10000
20000
20000
22000
8000
113000

Static Method for Forecasting

Year
Year 1

Year 2

Year 3

Month
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN

Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

Dt (based
Demand Deseasonalized
Seasonal
on
Dt
Demand Dt
regression) Factor St Forecast
2000
6068
0.33
0
3000
6138
0.49
0
3000
6208
0.48
0
3000
6278
0.48
0
4000
6348
0.63
0
6000
6419
0.93
0
7000
6542
6489
1.08
0
6000
6625
6559
0.91
0
10000
6667
6629
1.51
0
12000
6750
6700
1.79
0
14000
6875
6770
2.07
0
8000
7000
6840
1.17
0
3000
6917
6910
0.43
0
4000
6833
6981
0.57
0
3000
7000
7051
0.43
0
5000
7083
7121
0.70
0
5000
7167
7191
0.70
0
8000
7333
7262
1.10
0
3000
7375
7332
0.41
0
8000
7375
7402
1.08
0
12000
7500
7472
1.61
0
12000
7500
7543
1.59
0
16000
7375
7613
2.10
0
10000
7250
7683
1.30
0
2000
7333
7753
0.26
0
5000
7583
7824
0.64
0
5000
7792
7894
0.63
0
3000
8042
7964
0.38
0
4000
8250
8034
0.50
0
6000
8250
8105
0.74
0

Et
-2000
-3000
-3000
-3000
-4000
-6000
-7000
-6000
-10000
-12000
-14000
-8000
-3000
-4000
-3000
-5000
-5000
-8000
-3000
-8000
-12000
-12000
-16000
-10000
-2000
-5000
-5000
-3000
-4000
-6000

Year 4

Year 5

Year 6

JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC

31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72

7000
10000
15000
15000
18000
8000
5000
4000
4000
2000
5000
7000
10000
14000
16000
16000
20000
12000
5000
2000
3000
2000
7000
6000
8000
10000
20000
20000
22000
8000

8292
8375
8292
8208
8208
8292
8458
8750
8958
9042
9167
9417
9583
9500
9375
9333
9417
9458
9333
9083
9083
9417
9667
9583

8175
8245
8315
8386
8456
8526
8596
8667
8737
8807
8877
8948
9018
9088
9158
9229
9299
9369
9439
9510
9580
9650
9720
9791
9861
9931
10001
10072
10142
10212
Forecasts

0.86
1.21
1.80
1.79
2.13
0.94
0.58
0.46
0.46
0.23
0.56
0.78
1.11
1.54
1.75
1.73
2.15
1.28
0.53
0.21
0.31
0.21
0.72
0.61
0.81
1.01
2.00
1.99
2.17
0.78

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3815
5996
8110
8350
11351
17210
17783
21389
11102
0
4879
4789
4150
6519
8814
9069
12322
18671
19282
23179
12025
0

-7000
-10000
-15000
-15000
-18000
-8000
-5000
-4000
-4000
-2000
-5000
-7000
-10000
-14000
-16000
-16000
-20000
-12000
-5000
-2000
815
3996
1110
2350
3351
7210
-2217
1389
-10898
-8000

Estimate of standard dev

p = 12

At
2000
3000
3000
3000
4000
6000
7000
6000
10000
12000
14000
8000
3000
4000
3000
5000
5000
8000
3000
8000
12000
12000
16000
10000
2000
5000
5000
3000
4000
6000

(even)

bias
-2000
-5000
-8000
-11000
-15000
-21000
-28000
-34000
-44000
-56000
-70000
-78000
-81000
-85000
-88000
-93000
-98000
-106000
-109000
-117000
-129000
-141000
-157000
-167000
-169000
-174000
-179000
-182000
-186000
-192000

MSE
4000000
6500000
7333333
7750000
9400000
13833333
18857143
21000000
29777778
41200000
55272727
56000000
52384615
49785714
47066667
45687500
44470588
45555556
43631579
44650000
49380952
53681818
62478261
64041667
61640000
60230769
58925926
57142857
55724138
55066667

MAD
2000
2500
2667
2750
3000
3500
4000
4250
4889
5600
6364
6500
6231
6071
5867
5813
5765
5889
5737
5850
6143
6409
6826
6958
6760
6692
6630
6500
6414
6400

Percent
Error
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

MAPE
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

TS
-1.00
-2.00
-3.00
-4.00
-5.00
-6.00
-7.00
-8.00
-9.00
-10.00
-11.00
-12.00
-13.00
-14.00
-15.00
-16.00
-17.00
-18.00
-19.00
-20.00
-21.00
-22.00
-23.00
-24.00
-25.00
-26.00
-27.00
-28.00
-29.00
-30.00

7000
10000
15000
15000
18000
8000
5000
4000
4000
2000
5000
7000
10000
14000
16000
16000
20000
12000
5000
2000
815
3996
1110
2350
3351
7210
2217
1389
10898
8000

-199000
-209000
-224000
-239000
-257000
-265000
-270000
-274000
-278000
-280000
-285000
-292000
-302000
-316000
-332000
-348000
-368000
-380000
-385000
-387000
-386185
-382190
-381079
-378729
-375378
-368167
-370384
-368995
-379893
-387893

54870968
56281250
61393939
66205882
73571429
73305556
72000000
70526316
69128205
67500000
66463415
66047619
66837209
69772727
73911111
77869565
84723404
85958333
84714286
83100000
81483602
80223644
78733257
77377517
76174853
75742996
74500397
73249158
74020492
73853484

Estimate of standard deviation of forecast error:

6419
6531
6788
7029
7343
7361
7297
7211
7128
7000
6951
6952
7023
7182
7378
7565
7830
7917
7857
7740
7604
7535
7414
7320
7248
7247
7159
7059
7124
7139
8924

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
27
200
16
39
42
72
11
7
50
100

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
99
101
99
98
97
96
95
93
93
93

-31.00
-32.00
-33.00
-34.00
-35.00
-36.00
-37.00
-38.00
-39.00
-40.00
-41.00
-42.00
-43.00
-44.00
-45.00
-46.00
-47.00
-48.00
-49.00
-50.00
-50.79
-50.72
-51.40
-51.74
-51.79
-50.80
-51.74
-52.27
-53.32
-54.33

Monthly Demand ABC Corporation

25000

20000

15000
Sales
10000

5000

Month

Deseasonalized Demand Regression

SUMMARY OUTPUT
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations

0.974926
0.95048
0.949403
226.9015
48

ANOVA
df
Regression
Residual
Total

SS
MS
F Significance F
1 45456340 45456340 882.9169 1.14E-031
46 2368277 51484.28
47 47824617

Intercept
X Variable 1

Coefficients
Standard Error t Stat
P-value Lower 95%Upper 95%
Lower 95.0%
5997.261 79.19341 75.72929 6.13E-050 5837.853 6156.668 5837.853
70.24578 2.36407 29.71392 1.14E-031 65.48716 75.00441 65.48716

Seasonal Factors
Month
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC

Average - Seasonal Factor St

0.426609
0.474546
0.462623
0.3982
0.621315
0.834385
0.852882
1.151154
1.733
1.778078
2.123682
1.09472

Bias
0
-50000
-100000
-150000
-200000
bias
-250000
-300000
-350000
-400000
-450000
Period

Upper 95.0%
6156.668
75.00441