chapter4b

chapter4b - 4-1Operations Operations 4 Part 2Chapter 4 Part...

Info iconThis preview shows pages 1–19. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 4-1Operations Operations ManagementManagementForecastingForecastingChapter 4 - Part 2Chapter 4 - Part 24-2♦Trend is increasing or decreasing pattern.♦First, plot data to verify trend.♦If trend exists, then moving averages and exponential smoothing will always lag.Forecasting a TrendForecasting a Trend4-3Plot DataPlot DataPeriodActual453216841216204-4MA= 3 period Moving Average Moving Averages for a TrendMoving Averages for a TrendPeriodMA1821131341510.674.3351913.006.00MAError615.67?Sales4-5Trend GraphTrend GraphPeriodActualMA Forecast453216841216204-6MA= 3 period Moving Average ES = Exponential Smoothing with α=0.5 (F2=11)Exponential Smoothing for a Exponential Smoothing for a TrendTrend?PeriodMAES182113131141510.67124.333.051913.0013.56.005.5MAErrorESError615.671116.25?Sales4-7Trend GraphTrend GraphPeriodActualMA Forecast45321684121620ES Forecast4-8♦Moving Averages and (simple) Exponential Smoothing are always poor.♦For a linear trend can use:♦Exponential Smoothing with Trend Adjustment (skip: pp. 90-92).♦Linear Trend Projection (linear regression).♦For non-linear trend can use:♦Non-linear regression techniques.Forecasting a TrendForecasting a Trend4-9♦Used for forecasting linear trend line.♦PLOT TO VERIFY LINEAR RELATIONSHIP♦Assumes linear relationship between response variable, Y, and time, X.♦Y = a + bX♦a= y-axis intercept; b= slope♦Estimated by least squares method.♦Minimizes sum of squared errors.Linear Trend ProjectionLinear Trend Projection4-10Plot of X,Y DataPlot of X,Y DataTime (x)Values of Dependent Variable (Y)Actual observation4-11Least SquaresLeast SquaresDeviationDeviationDeviationDeviationDeviationDeviationDeviationTime (x)Values of Dependent Variable (Y)bxaY+=ˆActual observationPoint on regression line4-12Least SquaresLeast Squares♦Least squares line minimizes sum of squared deviations.♦This reduces large errors.♦Similar to MSE. ♦Deviations around least squares line are assumed to be random.4-13YabXii=+b> 0b< 0aaYXLinear Trend Projection ModelLinear Trend Projection Model4-14Least Squares EquationsLeast Squares EquationsEquation:iibxaYˆ+=Slope (p. 94):221=1=-∑-∑=xnxyxnyxbiniiiniY-Intercept:xbya-=4-15Linear Trend Projection ExampleLinear Trend Projection ExamplePeriod(x)18211313415519Sales(y)xy609582239xy=224x29162541x2=554.55156.25666.235552.13352242=-==×-××-=abx=3y=13.24-16TP = Trend Projection: Y = 5.4 + 2.6xLinear Trend Projection ExampleLinear Trend Projection ExamplePeriod(x)MAES12345811131519MAErr.610.6713.0015.67111213.51116.254.336.00Sales(y)3.05.5ESErr.TPErr.TP21.018.415.8-0.80.6Small errors!4-17Trend GraphTrend GraphMA ForecastES ForecastPeriodActual45321684121620TP Forecast4-18Models with SeasonalityModels with Seasonality♦Use if data exhibits seasonal patterns....
View Full Document

{[ snackBarMessage ]}

Page1 / 61

chapter4b - 4-1Operations Operations 4 Part 2Chapter 4 Part...

This preview shows document pages 1 - 19. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online