period t TAFt = Trend Adjusted Forecast for Period t made at the end of t-1) TAFt+k=Trend Adjusted Forecast for period t+k made at the end of period t Exponential Smoothing Ft+1 = aAt + (1 - a) Ft Forecasting next period= Forecast for the current period+ a fraction of the error for the current period Trend Adjusted Exponential Smoothing St = Smoothed Forecast at the end of period t Tt = Trend Estimate at the end of period t St = a1 At + (1 - a1) TAFt Tt = a2 (TAFt -TAFt -1) + (1
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Forecast – uses a single previous value of a time series as the basis of a forecast. Techniques for Averaging • What is the purpose of averaging? • Common Averaging Techniques o Moving Averages o Exponential smoothing Moving Average Exponential Smoothing Techniques for Trend Linear Trend Equation Curvilinear Trend Equation Techniques for Seasonality • What is seasonality? • What are seasonal relatives or indexes?
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Demand Forecasting Demand forecasting • Why is it important • How to evaluate • Qualitative Methods • Causal Models • Time-Series Models • Summary Production and operations management Product Development long term medium term short term Product portifolio Purchasing Manufacturing Distribution Supply network designFacility Partner selection location Distribution network design and layout Derivatuve Supply Demand forecasting is product developmentcontract the starting ? point
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Abstract Forecasts are extensively used to support business decisions and direct the work of operations managers. The two major types of forecasts are qualitative and quantitative. Within each of these types are multiple methods and models. Qualitative forecasts are based upon subjective data. Quantitative forecasts are derived from objective data. Both methods are not suitable for all situations and circumstances. Each has inherent strengths and weaknesses. The forecaster must understand
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Operations Management: Processes and Supply Chains‚ 10e (Krajewski et al.) Chapter 14 Forecasting 1) The repeated observations of demand for a product or service in their order of occurrence form a pattern known as a time series. Answer: TRUE Reference: Demand Patterns Difficulty: Easy Keywords: time series‚ repeated observations 2) One of the basic time series patterns is random. Answer: TRUE Reference: Demand Patterns Difficulty: Easy Keywords: time series‚ pattern‚ random
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TIME SERIES ANALYSIS Introduction Economic and business time series analysis is a major field of research and application. This analysis method has been used for economic forecasting‚ sales forecasting‚ stock market analysis and company internal control. In this paper‚ we will talk about time series and review techniques that are useful for analyzing time series data. Definition of Time Series and Time Series Analysis Time series is an ordered sequence of values of a variable at equally spaced
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The Walt Disney Company: Time Series Forecasting Introduction: The Walt Disney Company is known to be the worlds most admired entertainment company. It has recently decided to open up a new Pixar themed park in California. In order to do so‚ the company will need to assure their bank that it is capable of paying back loans in the future as well as reassuring owners and investors that they will not lose any money in the future. In order for Walt Disney
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TIME SERIES MODELS FOR FORECASTING NEW ONE-FAMILY HOUSES SOLD IN THE U.S. INTRODUCTION The housing market has been weak since its recent peak in 2005. Then‚ the sharp drop in the housing prices in 2007 contributed to the subprime loan crisis [1]. This dramatic change in the housing market not only affects the construction industry‚ but also may have a significant impact on the whole economy [3]. We are still in the midst of the housing problem with the increase in the delinquency rate and
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Developing Marketing Plan PLANNING • Process to develop a strategy to achieve desired objectives‚ to solve problems‚ and to facilitate action. • A systematic process of forecasting the future business environment and deciding on the most appropriate goals‚ objectives and positions for best exploiting that environment. • Planning is an activity and a process = formalised MARKETING PLANNING “Marketing Planning is the process of developing marketing plan incorporating overall marketing objectives
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From the information gathered a prediction for the forecast can be made. Exponential smoothing: The alpha method of 0.95 would work here. The formula would look like this: NF=LF + a (LD- LF) Last Forecast (LF) = $6‚300‚000 Last Data (LD) =
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