Chapter 12 Historical forecasting techniques

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Presentation transcript:

Chapter 12 Historical forecasting techniques Best Practice in Inventory Management Chapter 12 Historical forecasting techniques Dr Tony Wild

Figure 12.1 Moving Averages Dr Tony Wild

Figure 12.2 Contribution from Each Period to the Average 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 1 3 5 7 9 11 13 15 Age of Information Contributions to the Average Alpha =0.4 Alpha =0.3 Alpha =0.2 Alpha =0.1 Dr Tony Wild

Figure 12.3 Exponential Forecast Sensitivity Period Demand Forecast Demand a = 0.1 a = 0.2 a = 0.4 1 57 99 113 2 35 95 102 85 3 171 89 88 73 4 49 97 105 129 5 62 92 94 6 189 87 80 7 109 108 120 8 36 100 9 30 76 10 131 81 74 11 178 91 12 Forecast 127

Figure 12.4 Exponential Forecasting Dr Tony Wild

Figure 12.5 Contributions of Historical Data to the Forecast Dr Tony Wild Recent Old History in Periods

Figure 12.6 Exponentially Weighted MAD Week Demand Forecast alpha = 0.2 Absolute Error e error in MAD MAD Initial 113 60 1 57 102 56 -4 59.4 2 35 88 67 7 60.5 3 171 105 83 22 63.8 4 49 94 -8 62.6 5 62 87 32 -31 58.0 6 189 108 44 64.5 109 -63 55.0 8 36 72 17 57.6 9 30 81 64 58.5 10 131 91 50 57.2 11 178 61.7 Beta = 0.15 Dr Tony Wild

Figure 12.7 Focus Forecasting Period Demand Alternative forecasts 1 28 Model Parameters Forecast MAD 2 45 Type 3 33 Moving 12 month 26.8 5.9 4 39 Average 6 month 22.0 7.4 5 17 a =0 .1 28.3 9.5 6 27 Exponential a =0 .2 24.7 6.2 7 22 Smoothing a =0 .3 23.8 5.7 8 24 a =0 .4 23.9 5.2 9 15 Double 21.9 5.4 10 18 21.8 5.0 11 21.4 12 25 For Double Exponential Smoothing see next chapter Dr Tony Wild

Figure 12.8 Tracking Signals Variable demand Rising Demand Period Demand Exp Error Tracking signal a = 0.2 a = 0.4 a = 0.1 a = 0.3 Initial 0.00 0.0 47 1 57 -9.96 -0.2 -10.97 72 -0.81 2 35 -20.15 -0.4 -18.92 -0.3 67 2.33 0.1 1.97 3 171 -6.74 -0.1 -3.12 82 3.95 0.2 2.21 4 49 -11.63 -6.31 104 7.38 0.3 4.73 5 62 -16.32 -15.39 31 13.19 0.5 8.79 0.4 6 189 0.42 1.88 90 6.49 -0.06 7 109 3.60 5.99 91 10.12 5.37 8 36 -7.70 -7.52 105 12.89 6.77 9 30 -18.24 -16.88 92 16.92 0.6 9.35 10 131 -9.89 -6.08 113 17.80 8.47 11 178 6.17 10.49 100 21.35 0.7 11.09 Unacceptable forecasts are shaded Dr Tony Wild

Figure 12.9 Trigg’s Forecasting Method Trigg’s method is very elegant but not very useful in itself Dr Tony Wild

Figure 12.10 Tracking Signals Exponential Forecasting 12.10b Trigg's Method Period Demand Normal Exponential Forecast Error in Forecast Smoothed M.A.D. Smoothed Error Tracking Signal Trigg's Exponential Forecast a = 0.2 β = 0.1 d = 0.1 1 13 16 -3 4 2 15.4 -14.4 5.04 -1.44 -0.29 -15 5.1 -1.5 3 10 12.52 -2.52 4.79 -1.55 -0.32 11.59 -1.59 4.75 -1.51 17 12.02 4.98 4.81 -0.89 -0.19 11.08 5.92 4.87 -0.77 -0.16 5 11 13.01 -2.01 4.53 -1.01 -0.22 -1.02 4.48 -0.79 -0.18 6 19 12.61 6.39 4.71 -0.27 -0.06 11.84 7.16 7 13.89 2.11 4.45 -0.03 -0.01 4.16 4.69 0.42 0.09 8 15 14.31 0.69 4.08 0.04 0.01 12.21 2.79 4.5 0.66 0.15 9 26 14.45 11.55 4.82 1.19 0.25 12.62 13.38 5.39 1.93 0.36 38 16.76 21.24 6.47 3.2 0.49 17.41 20.59 6.91 3.79 0.55 31 21.01 9.99 6.82 3.88 0.57 28.72 2.28 6.44 3.64 12 40 23.01 16.99 7.84 5.19 30.01 6.8 4.28 0.63 35 26.4 8.6 7.91 5.53 0.7 36.3 -1.3 6.25 3.72 0.6 14 32 28.12 7.51 5.36 0.71 35.52 -3.52 5.98 0.5 28.9 33.76 Dr Tony Wild