This website uses cookies to ensure you have the best experience. Learn more

Forecasting With Indices Essay

1227 words - 5 pages

QRB/501
Dr. Julianne Manchester
August 22, 2010

Forecasting With Indices
According to Business: The Ultimate Resource (2009), “forecasting is the prediction of outcomes, trends, or expected future behavior of a business, industry sector, or the economy through the use of statistics. Forecasting is an operational research technique used as a basis for management planning and decision making. Common types of forecasting include trend analysis, regression analysis, Delphi technique, time series analysis, correlation, exponential smoothing, and input-output analysis.” Simply stated, forecasting is a way of predicting future results or expectations based on assumptions or historical ...view middle of the document...

Time series forecasting models try to predict the future based on past data. For example, sales figures collected for the past six weeks can be used to forecast sales for the seventh week (Chase, Jacobs, & Aquilano, 2005, p. 518).
Seasonal variation refers to the patterns of change in a time series within a year (Lind et al., 2008). These patterns tend to repeat themselves each year (Lind et al., 2008, p. 605). A seasonal factor is the amount of correction needed in a time series to adjust for the season of the year (Chase et al., 2005, p. 532). Table 1 indicates a significant increase in demand during April, May, June, July, and August. By contrast, it indicates a decrease in demand during September through March. Therefore, late spring through summer appears to be the peak period of unit demand for products sold by Company XYZ. The data from Table 1 is used to create an inventory demand index which provides the basis for the summer seasonal demand forecast (See Index 1). Meanwhile, Table 2 illustrates the forecast for year five. The forecast for year five will assist Company XYZ in determining material and production needs and help to manage costs appropriately.
Seasonal forecasting prepares a company for market demands. Forecasting methods assist companies in planning for industry demands throughout the year. Although a perfect forecast is unlikely, planning is an important aspect of meeting industry supply and demand.

Index 1 –Seasonal Demand – Summer
Summer Demand Index
Month Base Year Year 2 Year 3 Year 4 Index Y2 Index Y3 Index Y4 Index Y5
1 18,000 45,100 59,800 35,500 2.51 3.32 1.97 2.60
2 19,800 46,530 30,740 51,250 2.35 1.55 2.59 2.16
3 15,700 22,100 47,800 34,400 1.41 3.04 2.19 2.21
4 53,600 41,350 73,890 68,000 0.77 1.38 1.27 1.14
5 83,200 46,000 60,200 68,100 0.55 0.72 0.82 0.70
6 72,900 41,800 55,200 61,100 0.57 0.76 0.84 0.72
7 55,200 39,800 32,180 62,300 0.72 0.58 1.13 0.81
8 57,350 64,100 38,600 66,500 1.12 0.67 1.16 0.98
9 15,400 47,600 25,020 31,400 3.09 1.62 2.04 2.25
10 27,700 43,050 51,300 36,500 1.55 1.85 1.32 1.57
11 21,400 39,300 31,790 16,800 1.84 1.49 0.79 1.37
12 17,100 10,300 31,100 18,900 0.60 1.82 1.11 1.18...

Other Essays Like Forecasting with Indices

Criminal Justice Essay

845 words - 4 pages impact resource scheduling for a Criminal Justice organization. In regards to forecasting, seasonal indices allow you to recognize changes as they increases or decreases in recurring events, such as weather or holidays (Heizer and Bender, 2008). Cyclical patterns differ from seasonal patterns in that they occur with less frequency; typically every several years (Heizer, 2008). Forecasting is an important tool in the Criminal Justice Field and

Services Marketing Essay

5107 words - 21 pages important compliance requirements associated with listing a business on a stock exchange (7.3) LO 4 Detail the process for buying and selling of shares listed on a stock exchange (7.4) LO 5 Apply quantitative methods to the pricing of shares (7.5) LO 6 Understand the importance of taxation in the investment decision process (7.6) LO 7 Analyse the function and importance of stock exchange indices and interpret published share market information (7.7

Scope of Marketing Research

1080 words - 5 pages . Consequently, all areas of marketing and all marketing decisions should be supported with some level of research. While research is key to marketing decision making, it does not always need to be elaborate to be effective. Sometimes small efforts, such as doing a quick search on the Internet, will provide the needed information. However, for most marketers there are times when more elaborate research work is needed and understanding the right way

Jsb Market Research: Poland Gas Markets, 2013

2564 words - 11 pages -segments. It also provides information relating to the natural gas assets (gas fields, pipelines, LNG terminals and underground gas storage facilities) in Poland. The report compares the investment environment in Poland with other countries in the region. The profiles of the major companies operating in the natural gas sector in Poland together with the latest news and deals are also included in the report. Scope Historic and forecast data

Passive Management

2100 words - 9 pages .  Passive management (also called passive investing) is a financial strategy in which an investor (or a fund manager) invests in accordance with a pre-determined strategy that doesn't entail any forecasting (e.g., any use of market timing or stock picking would not qualify as passive management). The idea is to minimize investing fees and to avoid the adverse consequences of failing to correctly anticipate the future. The most popular method is to

Oil and Marco

1576 words - 7 pages go over $100 per barrel and US economy to fall into recession. In his article named “Oil and the U.S. Macroeconomy: An Update and a Simple Forecasting Exercise”, Kliesen shows that if the price of crude oil is permanently increasing to either $100 or $150 per barrel would cause a modest slowing in real gross domestic products (GDP) growth and its major components relative to base line forecast without oil price. The result of this could be

Jsb Market Research : India Oil Markets, 2013

2491 words - 10 pages . Facilitate market analysis and forecasting of future industry trends. Facilitate decision making on the basis of strong historic and forecast production, reserves and capacity data. Assess your competitor’s major crude oil assets and their performance. Analyze the latest news and financial deals in the oil sector of each country. Develop strategies based on the latest operational, financial, and regulatory events. Do deals with an

Mutual Funds

4378 words - 18 pages indices movements will be studied and future trends were determined using linear forecasting methods. Correlation and regression analysis will be performed on two different sets of data in order to ascertain the relationship between them. Table 4.1 Birla Sun Life AAF - Aggressive Plan – Growth DATE | NAV | | | 4th Jan'2010 | 31.39 | 5th Jan'2010 | 31.5602 | 6th Jan'2010 | 31.6406 | 7th Jan'2010 | 31.5407 | 8th Jan'2010

Strategic Presentation - at&T

4910 words - 20 pages Running head: STRATEGIC PLAN PAPER AND PRESENTATION Strategic Plan Paper Larry E. Moore University of Phoenix Executive Summary For the past 12 months AT&T has been working on a solution that will allow their wireless phones to be used on any other wireless carriers' network and not be inhibited by what is known as a SIM card lock. Even though cell phone manufacturers design phones to only work with certain networks that are

The Separation Of Capital Ownership And Control

1577 words - 7 pages cites that “the modern, publicly held corporation is a nexus of contracts, with the widely accepted notion in law and economics that corporations and their directors should maximize the value of the firm” (2008). He asserts that the modern corporate governance, which is the expectation of shareholders about managers’ behavior that comes from normal social sense, law and market forces, has a purpose of securing the promises of maximizing firm value

The Versatility And Flexibility Of OLED's

1014 words - 5 pages In April 1, 2002, organic light emitting diodes gain rise in the scientific community with their published, more practical form at Ames Laboratory. “Scientists at the U.S. Department of Energy's Ames Laboratory, in collaboration with scientists at the University of Michigan, Ann Arbor, have developed and demonstrated a novel, fluorescence-based chemical sensor that is more compact, versatile and less expensive than existing technology of its

Related Papers

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

Forecasting Using Indices Essay

612 words - 3 pages Forecasting Using Indices Tricia Thedford QRB 501/Quantitative Reasoning for Business March 4, 2012 Vinata Kulkarni, PhD Forecasting using indices Forecasting is an integral part of business. Forecasting allows investors to see anticipated growth/decline in a business. An accurate forecast will also allow a business to respond appropriately should a problem be evident in the desired business plan. Forecasting can be done on all data

Forecasting With Time Series Essay

1089 words - 5 pages Forecasting with Time Series QRB/501 Quantitative Reasoning for Business February 7, 2012 Forecasting with Time Series For most companies, forecasting is very important. Their future can be determined with forecasting and this also helps pin point the problems of the past. Forecasting can be done in many methods, depending on what exactly is being forecasted. A forecasting tool used to determine demand for various commodities or goods

Forcasting With Indicies Essay

597 words - 3 pages Running Head: Forecasting with Indices Forecasting with Indices University of Phoenix Online April 18, 2011 Ohidul Siddiqui The data that I used to gather my information was from the University of Phoenix website “The Summer Historical Inventory Data”. As you can see the data that was provided covers twelve months over a four year period. What I did was I took the average of each year, which was adding