Forecasting Indices Essay

516 words - 3 pages

Forecasting with Indices
Christopher L Kearney
University of Phoenix
QRB/501 Quantitative Reasoning for Business
Maryam Boluri
May 2, 2011

Forecasting with Indices
This writer will begin by defining forecast and index while detailing the importance of both as they relate to the makeup of any company. This type of data can be financial or non-financial depending on what the company offers.
Forecasting is a method used by companies to predict current and future trends. Many companies have realized this to be the backbone of the company because it predicts whether or not a company will break even and if a company does not break even decided whether the company will be up and running the following year.
An index is a point of ...view middle of the document...

The Summer Historical Data obtained from University of Phoenix Material was converted into an index using Microsoft excel software. The data showed typical demand for summer highs using demands in units, and the forecast was obtained by adding the first four years by months and dividing them by the four years to arrive at the forecast for the following year.
Forecasting is vitally important to any organizations growth for without it a company has no knowledge of the trends of sales. With proper forecasting a company knows when sales will increase or decrease thereby knowing how to schedule employees, over inventory or decrease the ordering of inventory. If more employees are needed this may also mean that more management staff and equipment is needed to ensure the company functions appropriately. So forecasting is indeed the backbone of any organization.
month year 1 year 2 year 3 year 4 Forecast
1 18,000 45100 59800 35500 39600
2 19,800 46530 30740 51250 37080
3 15,700 22100 47800 34400 30000
4 53,600 41350 73890 68000 59210
5 83,200 46000 60200 68100 64375
6 72,900 41800 55200 61100 57750
7 55,200 39800 32180 62300 47370
8 57,350 64100 38600 66500 56637
9 15,400 47600 25020 31400 29855
10 27,700 43050 51300 36500 39637
11 21,400 39300 31790 16800 27322
12 17,100 10300 31100 18900 19350

eHow, Money, How to Forecast Sales. Retrieved May 2, 2011. From
Summer Historical Inventory Data QRD/501 Version 2, University of Phoenix Material. Retrieved May 2, 2011. From qrb501_r2_university_of_phoenix_material_summer_historical_i

nventory_data (1)

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