Re: forecasting

Your data series is a bit confusing in that I'm not clear if the demand for
71 was last period or 12 periods ago. If it was 12 periods ago, then
exponential smoothing would project demand for the next period to be about
300 (depending on the weighting given). My comments on "trend" will assume
that the value of 71 begins the series.

If you haven't already, input the data into MS Excel (or some such tool) and
graph it. With MS Excel, you can also add a trendline using various
techniques. A 3-month moving average will show a downward trend whereas
exponential smoothing will show an upward trend. Which is "right"? I'll tell
you after the next period ends. [smile]

Imagine a series of data that shows 30 for each of the past 12 periods. What
is the projection for the next period and what is the trend? Well, most
people would project the next period to be 30 as they assume the trend to be
flat. In fact, the projection for the next period is ZERO!

The point is, the witless box is asked to manipulate content (numbers)
without regard to their context. And content without context is pretext. Had
someone bothered to ask what the item was that registered 30 per period,
they would have learned that it was my consumption of cigarette packets per
month and had they asked further, they would have learned that I decided to
quit and so the trend is meaningless and the projection for the next month
ought to be ZERO.

So, only you can know which trending technique to choose coz you know the
product and you know the business.



----- Original Message ----- 
From: <MisterBPCS@xxxxxxx>
To: <bpcs-l@xxxxxxxxxxxx>
Sent: Tuesday, April 13, 2004 9:11 AM
Subject: forecasting


> Hey gang,
> I have a client trying to use forecasting and the computations look
> reasonable but when looking at the trend (which should be going down) are
going up. The
> illustrations are:
>
> Period     Start Date     End Date       Demand
>   12        12/01/03      12/31/03          71.00
>   11        11/01/03      11/30/03         208.00
>   10        10/01/03      10/31/03          58.00
>    9         9/01/03       9/30/03         303.00
>    8         8/01/03       8/31/03          73.00
>    7         7/01/03       7/31/03         162.00
>    6         6/01/03       6/30/03         394.00
>    5         5/01/03       5/31/03          96.00
>    4         4/01/03       4/30/03         471.00
>    3         3/01/03       3/31/03         192.00
>    2         2/01/03       2/28/03         188.00
>    1         1/01/03       1/31/03         264.00
>   12        12/01/02      12/31/02
>
> And
>
>
>
>
> Any one have any suggestions as to why the issue?
> Thanks,
> Ric Weide
> rcweide@xxxxxxx
> or
> MisterBPCS@xxxxxxx
>


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