Module 18: Forecasting Flashcards
1
Q
What is a past sales pattern an example of?
A
A time series
2
Q
What is a time series?
A
A series of figures or values recorded over time
Graph of a time series is called a histogram
3
Q
What are the main features of a time series?
A
A trend
Seasonal variations
Cyclical variations e.g. economic cycles, longer terms than seasonal
Random variations - unknown factor
4
Q
What is the equation of a time series?
A
Y = T + S
Y is actual time series
T is trend component
S is seasonal component
5
Q
Steps for a forecast?
A
Find trend line Calculate trend figures Calc crude seasonal variations Calc future trend values Use future trend values and average seasonal variations to calculate forecast
6
Q
What are the methods for finding a trend?
A
Line of best fit drawn by eye Linear regression Moving averages x = time T = trend figure X continues to go up so Q1 y2 is number 5
7
Q
Additive model for crude variation?
A
Absolute difference between actual and trend
CSV = Actual - Trend
Average Seasonal Variation
8
Q
Multiplicative model for crude variation?
A
Actual sales as a percentage of trend
CSV = Actual/Trend
