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Chapter 4 Part 5

# Chapter 4 Part 5 - Agenda Assignment Seasonal Decomposition...

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1 1 Agenda Assignment Seasonal Decomposition Forecasting Model 2 Demand Forecasting Chapter 4 (Part 5)

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2 3 Quarter Year 1 Year 2 Year 3 Year 4 1 45 70 100 100 2 335 370 585 725 3 520 590 830 1160 4 100 170 285 215 Total Seasonal Decomposition Forecasting Step 1: Break data into seasonal periods. This method adjusts for a seasonal component in the data. Multiplicative Seasonal Decomposition Method 1000 1200 1800 2200 4 550 450 4 average quarterly demand Quarter Year 1 Year 2 Year 3 Year 4 1 45 70 100 100 2 335 370 585 725 3 520 590 830 1160 4 100 170 285 215 Total 1000 1200 1800 2200 Year 1: average quarterly demand = average seasonal demand = Step 2: Calculate “ average seasonal demand ” across seasonal periods. Average Seasonal Demand = 250 1000 total demand across seasonal periods # of seasonal periods 250 300
3 5 seasonal index = demand for period average seasonal demand Quarter Year 1 Year 2 Year 3 Year 4 1 45 70 100 100 2 335 370 585 725 3 520 590 830 1160 4 100 170 285 215 Total 1000 1200 1800 2200 average quarterly demand 250 300 450 550 Year 1, Qtr. 1: quarterly index = 45 = 0.18 / 250 = 0.18 / 250 = 1.34 Seasonal Index Step 3: Calculate “ seasonal index ” for each time period.

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