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BUSINESS
FORECASTING
NAVE METHOD
Quantitative Methodologies
Quantitative methods model historical demand
variation patterns (random, trend, seasonal or cyclical).
Once past history has been explained by a model,
extrapolations can be made about the future.
Some simplistic techniques are:
Averaging/Smoothing Models
Nave
Moving average
Weighted moving average
Exponential smoothing
3/25/2014
FORECASTING TECHNIQUE
NAVE METHOD
3/25/2014
NAVE MODEL I
or
+1 =
UNEMPLOYMENT RATE
Year
Quarter
UR
Year
Quarter
UR
1990
1990
1990
1990
1991
1991
1991
1991
1992
1992
1992
1992
1993
1993
1993
1993
1994
1994
1994
1994
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
5.3
5.3
5.7
6.1
6.6
6.8
6.9
7.1
7.4
7.6
7.6
7.4
7.1
7.1
6.8
6.6
6.6
6.2
6.0
5.6
1995
1995
1995
1995
1996
1996
1996
1996
1997
1997
1997
1997
1998
1998
1998
1998
1999
1999
1999
1999
2000
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
5.5
5.7
5.7
5.6
5.5
5.5
5.3
5.3
5.3
5.0
4.9
4.7
4.7
4.4
4.5
4.4
4.3
4.3
4.2
4.1
4.0
3/25/2014
UNEMPLOYMENT RATE
UNEMPLOYMENT RATE
Year
Quarter
UR
1990
1990
1990
1990
1991
1991
1991
1991
1992
1992
1992
1992
1993
1993
1993
1993
1994
1994
1994
1994
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
5.3
5.3
5.7
6.1
6.6
6.8
6.9
7.1
7.4
7.6
7.6
7.4
7.1
7.1
6.8
6.6
6.6
6.2
6.0
5.6
Forecasted
UR
5.3
5.3
5.7
6.1
6.6
6.8
6.9
7.1
7.4
7.6
7.6
7.4
7.1
7.1
6.8
6.6
6.6
6.2
6.0
Year
Quarter
UR
Forecasted
UR
1995
1995
1995
1995
1996
1996
1996
1996
1997
1997
1997
1997
1998
1998
1998
1998
1999
1999
1999
1999
2000
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
5.5
5.7
5.7
5.6
5.5
5.5
5.3
5.3
5.3
5.0
4.9
4.7
4.7
4.4
4.5
4.4
4.3
4.3
4.2
4.1
4.0
5.6
5.5
5.7
5.7
5.6
5.5
5.5
5.3
5.3
5.3
5.0
4.9
4.7
4.7
4.4
4.5
4.4
4.3
4.3
4.2
4.1
3/25/2014
NAIVE MODEL II
3/25/2014
UNEMPLOYMENT RATE
NAVE MODEL II
FORECASTS
Year
Quarter
UR
1990
1990
1990
1990
1991
1991
1991
1991
1992
1992
1992
1992
1993
1993
1993
1993
1994
1994
1994
1994
1995
1995
1995
1995
1996
1996
1996
1996
1997
1997
1997
1997
1998
1998
1998
1998
1999
1999
1999
1999
2000
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
5.3
5.3
5.7
6.1
6.6
6.8
6.9
7.1
7.4
7.6
7.6
7.4
7.1
7.1
6.8
6.6
6.6
6.2
6.0
5.6
5.5
5.7
5.7
5.6
5.5
5.5
5.3
5.3
5.3
5.0
4.9
4.7
4.7
4.4
4.5
4.4
4.3
4.3
4.2
4.1
4.0
Forecasted
UR
Error
5.30
5.94
6.34
6.90
6.92
6.96
7.22
7.58
7.72
7.60
7.28
6.92
7.10
6.62
6.48
6.60
5.96
5.88
5.36
5.44
5.82
5.70
5.54
5.44
5.50
5.18
5.30
5.30
4.82
4.84
4.58
4.70
4.22
4.56
4.34
4.24
4.30
4.14
4.04
0.40
0.16
0.26
-0.10
-0.02
0.14
0.18
0.02
-0.12
-0.20
-0.18
0.18
-0.30
-0.02
0.12
-0.40
0.04
-0.28
0.14
0.26
-0.12
-0.10
-0.04
0.06
-0.20
0.12
0.00
-0.30
0.08
-0.14
0.12
-0.30
0.28
-0.16
-0.04
0.06
-0.10
-0.04
-0.04
3/25/2014
Year
Quarter
UR
1990
1990
1990
1990
1991
1991
1991
1991
1992
1992
1992
1992
1993
1993
1993
1993
1994
1994
1994
1994
1995
1995
1995
1995
1996
1996
1996
1996
1997
1997
1997
1997
1998
1998
1998
1998
1999
1999
1999
1999
2000
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
5.3
5.3
5.7
6.1
6.6
6.8
6.9
7.1
7.4
7.6
7.6
7.4
7.1
7.1
6.8
6.6
6.6
6.2
6.0
5.6
5.5
5.7
5.7
5.6
5.5
5.5
5.3
5.3
5.3
5.0
4.9
4.7
4.7
4.4
4.5
4.4
4.3
4.3
4.2
4.1
4.0
5.30
5.82
6.22
6.75
6.86
6.93
7.16
7.49
7.66
7.60
7.34
7.01
7.10
6.71
6.54
6.60
6.08
5.94
5.48
5.47
5.76
5.70
5.57
5.47
5.50
5.24
5.30
5.30
4.91
4.87
4.64
4.70
4.31
4.53
4.37
4.27
4.30
4.17
4.07
5.30
5.94
6.34
6.90
6.92
6.96
7.22
7.58
7.72
7.60
7.28
6.92
7.10
6.62
6.48
6.60
5.96
5.88
5.36
5.44
5.82
5.70
5.54
5.44
5.50
5.18
5.30
5.30
4.82
4.84
4.58
4.70
4.22
4.56
4.34
4.24
4.30
4.14
4.04
5.30
6.06
6.46
7.05
6.98
6.99
7.28
7.67
7.78
7.60
7.22
6.83
7.10
6.53
6.42
6.60
5.84
5.82
5.24
5.41
5.88
5.70
5.51
5.41
5.50
5.12
5.30
5.30
4.73
4.81
4.52
4.70
4.13
4.59
4.31
4.21
4.30
4.11
4.01
Error,
P=0.3
0.40
0.28
0.38
0.05
0.04
0.17
0.24
0.11
(0.06)
(0.20)
(0.24)
0.09
(0.30)
(0.11)
0.06
(0.40)
(0.08)
(0.34)
0.02
0.23
(0.06)
(0.10)
(0.07)
0.03
(0.20)
0.06
(0.30)
(0.01)
(0.17)
0.06
(0.30)
0.19
(0.13)
(0.07)
0.03
(0.10)
(0.07)
(0.07)
Error,
P=0.6
0.40
0.16
0.26
(0.10)
(0.02)
0.14
0.18
0.02
(0.12)
(0.20)
(0.18)
0.18
(0.30)
(0.02)
0.12
(0.40)
0.04
(0.28)
0.14
0.26
(0.12)
(0.10)
(0.04)
0.06
(0.20)
0.12
(0.30)
0.08
(0.14)
0.12
(0.30)
0.28
(0.16)
(0.04)
0.06
(0.10)
(0.04)
(0.04)
Error,
P=0.9
0.40
0.04
0.14
(0.25)
(0.08)
0.11
0.12
(0.07)
(0.18)
(0.20)
(0.12)
0.27
(0.30)
0.07
0.18
(0.40)
0.16
(0.22)
0.26
0.29
(0.18)
(0.10)
(0.01)
0.09
(0.20)
0.18
(0.30)
0.17
(0.11)
0.18
(0.30)
0.37
(0.19)
(0.01)
0.09
(0.10)
(0.01)
(0.01)
3/25/2014
FORECAST EVALUATION
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