6.

1 Summary Tables of Accuracy Parameters NPP at 95% CL Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

MAPE Single Exponential Smoothing (Alpha =0.2) Single Exponential Smoothing (Alpha =0.3) Moving Average: 5 months Linear Trend Trend and Seasonal Decomposition Double Exponential Smoothing (Alpha =0.2, Gamma=0.2) Double Exponential Smoothing (Alpha =0.3, Gamma=0.3) Moving Average: 3 months Winter's Model (alpha 0.2, Gamma 0.2 and Delta 0.2) Winter's Model (alpha 0.3, Gamma 0.3 and Delta 0.3) Seasonal

MAD

MSD 383442 04 385108 05 413543 39 364129 37 360647 47 428211 0 450932 12 463204 44 473512 46 526939 61 550637 81

Commen t Better Model Better Model Better Model Not Accurate Not Accurate Not Accurate Not Accurate Not Accurate Not Accurate Not Accurate Not Accurate

8 8 8 8 9 9 9 9 9 10 11

4585 4613 4615 4632 4787 5012 5121 5184 5297 5601 6074

Summary tables are shown on ascending order on the basis of MAD. It is noticeable that MAD of Single Exponential smoothing (Alpha 0.20) and (Alpha 0.3) and Moving Average 5 Month (MA5) are better compared to other models.

10

12

1000

2000

3000

4000

5000

6000

7000

Models:

Single Exp. Smoothing (0.2)

Single Exp. Smoothing (0.3)

MA5

Linear Trend

Trend and Seasonal Decomposition

0 Single Exp. Smoothing (0.2) Single Exp. Smoothing (0.3) MA5 Linear Trend Trend and Seasonal Decomposition Double Exp. Smoothing (0.2) Double Exp. Smoothing (0.3) MA3 Winter's Model 1 Winter's Model 2 Seasonal

Double Exp. Smoothing (0.2)

Double Exp. Smoothing (0.3)

MA3

Comparison Graph of MAD for the different Forecast Models:

Winter's Model 1

Comparison Graph of MAPE for the different Forecast

Winter's Model 2

Seasonal

6.2

Tracking Signal

Tracking Signal (TS) is computed by dividing the total residuals by their mean absolute deviation (MAD). To stay within 3 standard deviations, the tracking signal that is within 4 MAD is often considered to be good enough. In this study we have calculated Tracking Signal with all models but only the best ones are taken into account (as above). Moving Average (MA5)
Tracking S nal for Moving Averag (MA5) ig e
12 10 8 6

TS

4 2 0 -2 1 -4 -6 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59

Month

Here we can notice that after the month of 37, most of the values fall above 8 and even in case of month 52-55 values are above 10.

Single Exponential Smoothing (Alpha 0.3)

TrackingS nal for S le Exponential S ig ing moothing(Alpha 0.3)
6 5 4 3 TS 2 1 0 -1 -2 -3 Month 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59

In the case of Single Exponential Smoothing (Alpha 0.3) all the values are between 4 except the month of 60, 53 and 58. It seems the tracking signal values are very well plotted Winter Model 1
Tracking S nal for Winters Model 1 ig
4 2 0 1 TS -2 -4 -6 -8 Month 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59

In case of Winter Model 1 all the values are between 8 which is quite acceptable according to Tracking signal calculation.

ARIMA Model
Tracking S nal for ARIMA ig
12 10 8 6 TS 4 2 0 -2 -4 Month 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59

Here in the Tracking Signal graph of ARIMA shows that number of values after 38th Month lies above 8 and some of them falls into above 10. Other than that most of the values are in between 8.

7.0

Conclusion

DHL Bangladesh Limited is the market leader in Air Express Shipment in Bangladesh for a long time. Most of the Financial Institution, Textile Industries, RMGs are the prime customer as 76% shipment orders came from these segments. If we observe the data closely the seasonality is present as the European Market has some seasonal dimension which effects the shipment volume of DHL. To forecast future air express package, DHL must have a forecasting method that is reliable and accurate. The forecast should be cost-effective; the benefits should overweight the costs. Therefore it makes a great deal of sense to experiment with various forecasting models to determine which model generates the most reliable results. To that end this report examines the forecasting accuracy of several models, moving average, exponential smoothing, seasonal decomposition, seasonal plus trend decomposition, Holt-Winters and ARIMA. Through examining these models using MAD, MSE, and MAPE as measures Average resulting of accuracy, we determine Trend, that & the Single Exponential Smoothing (Using Alpha 0.2 & 0.3) , Moving (MA5), less Linear Trend to Seasonal forecasting Decomposition model are giving better fits to original data and error comparatively other techniques. All these forecasting has MAD values around 4500-

4700, MAPE values of 8 & 9 which are the lower values in the table

Among the other forecasting techniques, Holt-Winters Model 1 is incorporating smoothing constant Alpha for level, Gamma for trend, and Delta for seasonal and ARIMA incorporates ACF, PACF, lag, and difference all. After analyzing MAPE, MAD, MSD of all the top four models we found that Single Exponential Smoothing (Alpha 0.2) is the marginally better among the four models.

After that we have calculated all the Tracking Signals for these forecasting models. After analyzing the tracking signal values we have found that comparatively Moving Average Method (MA5), Single Exponential Smoothing using alpha 0.2 & 0.3, Winters Model 1 and ARIMA gives significantly better result comparing to other forecasting method. For the conclusion, we can came to a single decision that, if we consider the both the MAD, MAPE, MSE comparison and TS comparison Winter Model 1 and Single Exponential Smoothing (Alpha 0.3) are the better model for forecast the shipment model. If we have to choose one, then the single Exponential Smoothing is the best possible method in this project outcome.