BUS140 HW3 - months. Once we get the percent increase for...

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Professor Denzler BUS140 15 October, 2008 Demand Forecasting We are trying to get a demand forecast for the months of 2008 based on data from the previous five years. From looking at the data we can observe trends occurring in each of the months from every year. We can see that sales increase by a pretty constant at 4% for each month. The way we get our sales forecast for the 2008 months is we gather the actual sales for each month of every previous year. For example, we will look at the actual sales for January in each of the previous years and calculate the percent increase from one year to the next. We do this by making a formula that would divide the actual sales of January 2003 by the sum of the actual sales of January 2003 plus the actual sales of January 2004 or: % Increase= 13/(13+18), where 18 is the Actual Sales for January 2004 We use this same formula for the following months of January as well as the other eleven
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Unformatted text preview: months. Once we get the percent increase for each month of every year then we must find the average % increase for each month. We get this by adding up each percent increase of every month from every year and dividing each by the amount of years that we compared. Once we obtain the average percent increase from each month we can then use it forecast our demand for 2008. The way we get this is by multiplying the actual sales of the 2007 months by the respected average percent increase of the previous months. Actual Sales of 2007 month x Average % increase of previous months Now that we have our sales forecast for 2008 we can calculate our forecast error by subtracting our Actual sales by our sales forecast: Forecast Error = Actual Sales – Sales Forecast To find our MAD we must use the following formula: MAD = ∑ |dt – Ft| / n...
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This note was uploaded on 09/08/2010 for the course BUS 140 at San Jose State University .

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BUS140 HW3 - months. Once we get the percent increase for...

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