Background

The Glass Slipper restaurant has operated in a resort community near a popular ski area of New Mexico and busiest
during the first 3 months of the year. The Glass slipper offered the ultimate dining experience with breathtaking views of the
surrounding mountains. James and Deena Weltee, the owner, place special attention in setting the perfect ambiance making dining
a truly magnificent gourment experience. The Glass Slipper has developed and maintained a reputation as one of the "must visit"
places in that region of New Mexico.

Objective
After careful analysis of their financial condition, the Weltee's decided to sell the Glass Slipper and open a bed and
breakfast on a beautiful beach in Mexico. Although not retired yet, this would put them in the retirement setting they have been
longing for many years. They would have to hire a manager that would allow them to begin a semi-retirement life in paradise. The
Glass Slipper for the right price. The price of the business would be based on the value of the property and equipment, as well as
projections of future income. A forecast of sales for the next year is needed to help in the determination of the calue of the
restaurant. Monthly sales for each of the past 3 years are provided below.

Monthly Revenue (in $1,000s)

Month 2011 ### 2013
January 436 444 454
February 419 425 439
March 414 423 434
April 318 331 338
May 306 318 331
June 240 245 254
July 240 255 264
August 216 223 231
September 202 212 220
October 225 233 243
November 270 278 289
December 315 322 330
12-Month Moving Average
Enter
Enter the
the past
past demands
demands in
in the
the data
data area
area
Forecasting Simple Linear Regression
Num pds 12

Data Forecasts and Error Analysis

Month Demand Forecast Error Absolute Squared Abs Pct Err
Jan-08 438
Feb-08 420
500
Mar-08 414
Apr-08 318 400
May-08 306
300
Jun-08 240

Value
Jul-08 240 200
Aug-08 216
100
Sep-08 198
Oct-08 225 0
Nov-08 270 1 2 3 4 5 6 7 8 9 10111
Dec-08 315
Jan-09 444 300.000 144.000 144.000 20736.000 0.324
Feb-09 425 300.500 124.500 124.500 15500.250 0.293
Mar-09 423 300.917 122.083 122.083 14904.340 0.289
Apr-09 331 301.667 29.333 29.333 860.444 0.089
May-09 318 302.750 15.250 15.250 232.563 0.048 The lines above the "forecast line" illu
Jun-09 245 303.750 -58.750 58.750 3451.563 0.240 "forecast line" show their offseason. T
Jul-09 255 304.167 -49.167 49.167 2417.361 0.193 New Year begins. Basically, the up and
Aug-09 223 305.417 -82.417 82.417 6792.507 0.370 performance.
Sep-09 210 306.000 -96.000 96.000 9216.000 0.457
Oct-09 233 307.000 -74.000 74.000 5476.000 0.318
Nov-09 278 307.667 -29.667 29.667 880.111 0.107
Dec-09 322 308.333 13.667 13.667 186.778 0.042
Jan-10 450 308.917 141.083 141.083 19904.507 0.314
Feb-10 438 309.417 128.583 128.583 16533.674 0.294
Mar-10 434 310.500 123.500 123.500 15252.250 0.285
Apr-10 338 311.417 26.583 26.583 706.674 0.079
May-10 331 312.000 19.000 19.000 361.000 0.057
Jun-10 254 313.083 -59.083 59.083 3490.840 0.233
Jul-10 264 313.833 -49.833 49.833 2483.361 0.189
Aug-10 231 314.583 -83.583 83.583 6986.174 0.362
Sep-10 224 315.250 -91.250 91.250 8326.563 0.407
Oct-10 243 316.417 -73.417 73.417 5390.007 0.302
Nov-10 289 317.250 -28.250 28.250 798.063 0.098
Dec-10 335 318.167 16.833 16.833 283.361 0.050
 Total 129.000 1679.833 161170.389 5.437
Average 5.375 69.993 6715.433 0.227
Bias MAD MSE MAPE
SE 85.592
Next period 319.25
 Forecasting

2 3 4 5 6 7 8 9 101112131415161718192021222324252627282930313233343536
Time

Demand Forecast

ve the "forecast line" illustrate their busiest months, while the lines below the
" show their offseason. The graph also shows moderate increase in sales as each
gins. Basically, the up and down is more of a seasonality issue and the "Gray" is
.
Regression Analysis Refression Analysis
IfIfthis
this isis trend
trend analysis
analysisthen
then simply
simply enter
enterthe
thepast
pastdemands
demands in
in the
the demand
demand column.
column. IfIf this
thi
Forecasting Simple linear regression
y,x
y,x pairs with y first and enter a new value of x at the bottom in order to forecast y.
pairs with y first and enter a new value of x at the bottom in order to forecast y.
Data Forecasts and Error Analysis
Month Demand (y) Period(x) Forecast Error Absolute Squared Abs Pct Err
Jan-08 438 1 329.727 108.273 108.273 11723.102 0.247
Feb-08 420 2 328.565 91.435 91.435 8360.439 0.218
Mar-08 414 3 327.402 86.598 86.598 7499.144 0.209 500
Apr-08 318 4 326.240 -8.240 8.240 67.902 0.026
400
May-08 306 5 325.078 -19.078 19.078 363.973 0.062
Jun-08 240 6 323.916 -83.916 83.916 7041.881 0.350 300
Jul-08 240 7 322.754 -82.754 82.754 6848.184 0.345
200
Aug-08 216 8 321.592 -105.592 105.592 11149.584 0.489
Sep-08 198 9 320.429 -122.429 122.429 14988.965 0.618 100
Oct-08 225 10 319.267 -94.267 94.267 8886.318 0.419
0
Nov-08 270 11 318.105 -48.105 48.105 2314.101 0.178
0 5 10
Dec-08 315 12 316.943 -1.943 1.943 3.775 0.006
Jan-09 444 13 315.781 128.219 128.219 16440.168 0.289
Feb-09 425 14 314.619 110.381 110.381 12184.049 0.260
Mar-09 423 15 313.456 109.544 109.544 11999.788 0.259 The seasonality is consistent but the slop
Apr-09 331 16 312.294 18.706 18.706 349.903 0.057 performance trend line, the regression p
May-09 318 17 311.132 6.868 6.868 47.168 0.022
to be: Y = 330.889 - 1.162X
Jun-09 245 18 309.970 -64.970 64.970 4221.097 0.265
The Slope of the trend line is negative wh
Jul-09 255 19 308.808 -53.808 53.808 2895.280 0.211
index in Jan and Feb causes the trend lin
Aug-09 223 20 307.646 -84.646 84.646 7164.885 0.380
Sep-09 210 21 306.483 -96.483 96.483 9309.063 0.459
Oct-09 233 22 305.321 -72.321 72.321 5230.374 0.310
Nov-09 278 23 304.159 -26.159 26.159 684.302 0.094
Dec-09 322 24 302.997 19.003 19.003 361.114 0.059
Jan-10 450 25 301.835 148.165 148.165 21952.916 0.329
Feb-10 438 26 300.673 137.327 137.327 18858.795 0.314
Mar-10 434 27 299.511 134.489 134.489 18087.423 0.310
Apr-10 338 28 298.348 39.652 39.652 1572.253 0.117
May-10 331 29 297.186 33.814 33.814 1143.374 0.102
Jun-10 254 30 296.024 -42.024 42.024 1766.019 0.165
Jul-10 264 31 294.862 -30.862 30.862 952.455 0.117
Aug-10 231 32 293.700 -62.700 62.700 3931.252 0.271
Sep-10 224 33 292.538 -68.538 68.538 4697.394 0.306
Oct-10 243 34 291.375 -48.375 48.375 2340.177 0.199
Nov-10 289 35 290.213 -1.213 1.213 1.472 0.004
 Dec-10 335 36 289.051 45.949 45.949 2111.306 0.137
Total 0.000 2436.847 227549.393 8.204
Intercept 330.889 Average 0.000 67.690 6320.816 0.228
Slope -1.162 Bias MAD MSE MAPE
SE 81.808
Forecast 287.888888889 37
Correlation -0.150
Coefficient of determination 0.023
 ands in
mands in the
the demand
demand column.
column. IfIf this
thisis
is causal
causalregression
regression then
then enter
enter the
the
ottom in order to forecast y.
bottom in order to forecast y.

Regression

5 10 15 20 25 30 35 40
Column B Linear (Column B)

onality is consistent but the slope is not. While the 12-month moving average plotted a positive
nce trend line, the regression plotted a negative trend line. A trend line based on the raw data is found
330.889 - 1.162X

e of the trend line is negative which would indicate that sales are declining over time. The high seasonal
an and Feb causes the trend line on the unadjusted data to appear to have a negative slope.
Multiplicative Decomposition

Enter past demands in the data area. Do not change the time period numbers!
Enter past demands in the data area. Do not change the time period numbers!
Forecasting Decomposition, multiplicative
12 seasons

Data
Month Demand (y) Time (x) Average Ratio Seasonal Smoothed Unadjusted
Jan-08 438 1 309.389 1.416 1.435 305.208 295.930
Feb-08 420 2 309.389 1.358 1.382 303.843 296.699
Mar-08 414 3 309.389 1.338 1.369 302.330 297.468
Apr-08 318 4 309.389 1.028 1.063 299.045 298.237
May-08 306 5 309.389 0.989 1.029 297.402 299.006
Jun-08 240 6 309.389 0.776 0.796 301.434 299.775
Jul-08 240 7 309.389 0.776 0.818 293.491 300.544
Aug-08 216 8 309.389 0.698 0.722 299.230 301.313
Sep-08 198 9 309.389 0.640 0.681 290.786 302.083
Oct-08 225 10 309.389 0.727 0.755 297.914 302.852
Nov-08 270 11 309.389 0.873 0.902 299.409 303.621
Dec-08 315 12 309.389 1.018 1.047 300.795 304.390
Jan-09 444 13 309.389 1.435 1.435 309.389 305.159
Feb-09 425 14 309.389 1.374 1.382 307.460 305.928
Mar-09 423 15 309.389 1.367 1.369 308.902 306.697
Apr-09 331 16 309.389 1.070 1.063 311.270 307.466
May-09 318 17 309.389 1.028 1.029 309.065 308.235
Jun-09 245 18 309.389 0.792 0.796 307.714 309.004
Jul-09 255 19 309.389 0.824 0.818 311.835 309.773
Aug-09 223 20 309.389 0.721 0.722 308.927 310.543
Sep-09 210 21 309.389 0.679 0.681 308.410 311.312
Oct-09 233 22 309.389 0.753 0.755 308.506 312.081
Nov-09 278 23 309.389 0.899 0.902 308.280 312.850
Dec-09 322 24 309.389 1.041 1.047 307.479 313.619
Jan-10 450 25 309.389 1.454 1.435 313.570 314.388
Feb-10 438 26 309.389 1.416 1.382 316.864 315.157
Mar-10 434 27 309.389 1.403 1.369 316.935 315.926
Apr-10 338 28 309.389 1.092 1.063 317.852 316.695
May-10 331 29 309.389 1.070 1.029 321.700 317.464
Jun-10 254 30 309.389 0.821 0.796 319.018 318.233
Jul-10 264 31 309.389 0.853 0.818 322.841 319.002
Aug-10 231 32 309.389 0.747 0.722 320.010 319.772
Sep-10 224 33 309.389 0.724 0.681 328.970 320.541
Oct-10 243 34 309.389 0.785 0.755 321.747 321.310
Nov-10 289 35 309.389 0.934 0.902 320.478 322.079
Dec-10 335 36 309.389 1.083 1.047 319.893 322.848

Average Intercept 295.161

Slope 0.769
Ratios
Season 1 Season 2 Season 3 Season 4 Season 5 Season 6 Season 7 Season 8
1.416 1.358 1.338 1.028 0.989 0.776 0.776 0.698
1.435 1.374 1.367 1.070 1.028 0.792 0.824 0.721
1.454 1.416 1.403 1.092 1.070 0.821 0.853 0.747
Average 1.435 1.382 1.369 1.063 1.029 0.796 0.818 0.722

Forecasts
Period Unadjusted Seasonal Adjusted
37 323.617 1.435 464.419 Forecasts
38 324.386 1.382 448.397
500
39 325.155 1.369 445.256
40 325.924 1.063 346.583 450
41 326.693 1.029 336.138 400
42 327.462 0.796 260.723 350
43 328.232 0.818 268.408 300
44 329.001 0.722 237.490
250
45 329.770 0.681 224.544
200
46 330.539 0.755 249.640
47 331.308 0.902 298.766 150
48 332.077 1.047 347.760 100
50
0
Forecasted sales for each month of the next year. The gives 1 2 3 4 5 6 7 8

the seasonal indices, the unadjusted forecasts found using Peri od Unadjusted Sea s ona l
the trend line, and the final (adjusted) forecasts for the next
year
 Forecasts and Error Analysis
Adjusted Error |Error| Error^2 Abs Pct Err
424.685 13.315 13.315 177.285 0.030
410.125 9.875 9.875 97.507 0.024
407.343 6.657 6.657 44.320 0.016
317.141 0.859 0.859 0.737 0.003
307.651 -1.651 1.651 2.724 0.005
238.679 1.321 1.321 1.745 0.006
245.767 -5.767 5.767 33.264 0.024
217.504 -1.504 1.504 2.262 0.007
205.692 -7.692 7.692 59.162 0.039
228.729 -3.729 3.729 13.908 0.017
273.798 -3.798 3.798 14.428 0.014
318.765 -3.765 3.765 14.174 0.012
437.930 6.070 6.070 36.850 0.014
422.883 2.117 2.117 4.483 0.005
419.981 3.019 3.019 9.117 0.007
326.955 4.045 4.045 16.359 0.012
317.146 0.854 0.854 0.729 0.003
246.027 -1.027 1.027 1.055 0.004
253.314 1.686 1.686 2.841 0.007
224.166 -1.166 1.166 1.360 0.005
211.976 -1.976 1.976 3.904 0.009
235.700 -2.700 2.700 7.288 0.012
282.121 -4.121 4.121 16.982 0.015
328.430 -6.430 6.430 41.342 0.020
451.174 -1.174 1.174 1.378 0.003
435.640 2.360 2.360 5.570 0.005
432.619 1.381 1.381 1.908 0.003
336.769 1.231 1.231 1.514 0.004
326.642 4.358 4.358 18.990 0.013
253.375 0.625 0.625 0.390 0.002
260.861 3.139 3.139 9.851 0.012
230.828 0.172 0.172 0.030 0.001
218.260 5.740 5.740 32.947 0.026
242.670 0.330 0.330 0.109 0.001
290.443 -1.443 1.443 2.084 0.005
338.095 -3.095 3.095 9.577 0.009
Total 18.114 120.190 688.175 0.393
0.503 3.339 19.116 0.011
Bias MAD MSE MAPE
SE 5.593
 Season 9 Season 10 Season 11 Season 12
0.640 0.727 0.873 1.018
0.679 0.753 0.899 1.041
0.724 0.785 0.934 1.083
0.681 0.755 0.902 1.047

Forecasts

5 6 7 8 9 10 11 12
Unadjusted Sea s ona l Adjusted
Forecasting Decomposition, multiplicative
Enter
Enter past
past demands
demands in
in the
the data
data area.
area. Do
Do not
not change
change the
the time
time period
period
numbers!
12 seasons numbers!

Data
Period Demand (y) Time (x) Average Ratio Seasonal Smoothed
Jan-08 438 1 1.4444518 303.22923
Feb-08 420 2 1.3905291 302.04331
Mar-08 414 3 1.3771202 300.62736
Apr-08 318 4 1.0719067 296.6676
May-08 306 5 1.0371518 295.03878
Jun-08 240 6 0.7954053 301.73297
Jul-08 240 7 300 300.25 0.7993339 0.8120659 295.54253
Aug-08 216 8 300.5 300.70833 0.718304 0.7188778 300.46833
Sep-08 198 9 300.91667 301.29167 0.6571705 0.6662511 297.18526
Oct-08 225 10 301.66667 302.20833 0.7445195 0.7460066 301.60592
Nov-08 270 11 302.75 303.25 0.8903545 0.8899179 303.39876
Dec-08 315 12 303.75 303.95833 1.0363263 1.031788 305.29527
Jan-09 444 13 304.16667 304.79167 1.4567327 1.4444518 307.38306
Feb-09 425 14 305.41667 305.70833 1.390214 1.3905291 305.63906
Mar-09 423 15 306 306.5 1.3800979 1.3771202 307.16273
Apr-09 331 16 307 307.33333 1.0770065 1.0719067 308.79552
May-09 318 17 307.66667 308 1.0324675 1.0371518 306.60893
Jun-09 245 18 308.33333 308.625 0.7938437 0.7954053 308.01907
Jul-09 255 19 308.91667 309.16667 0.8247978 0.8120659 314.01394
Aug-09 223 20 309.41667 309.95833 0.7194515 0.7188778 310.20572
Sep-09 210 21 310.5 310.95833 0.6753316 0.6662511 315.19649
Oct-09 233 22 311.41667 311.70833 0.7474937 0.7460066 312.32968
Nov-09 278 23 312 312.54167 0.8894814 0.8899179 312.38835
Dec-09 322 24 313.08333 313.45833 1.0272498 1.031788 312.07961
Jan-10 450 25 313.83333 314.20833 1.4321708 1.4444518 311.53688
Feb-10 438 26 314.58333 314.91667 1.3908441 1.3905291 314.98802
Mar-10 434 27 315.25 315.83333 1.3741425 1.3771202 315.15042
Apr-10 338 28 316.41667 316.83333 1.0668069 1.0719067 315.32594
May-10 331 29 317.25 317.70833 1.0418361 1.0371518 319.14325
Jun-10 254 30 318.16667 318.70833 0.7969669 0.7954053 319.33406
Jul-10 264 31 319.25 0.8120659 325.09678
Aug-10 231 32 0.7188778 321.33418
Sep-10 224 33 0.6662511 336.20959
Oct-10 243 34 0.7460066 325.73439
Nov-10 289 35 0.8899179 324.74904
Dec-10 335 36 1.031788 324.6791

Average Intercept 294.5242

Slope 0.8604625
Ratios
Season 1 Season 2 Season 3 Season 4 Season 5 Season 6 Season 7
0.7993339
1.45673274 1.390214 1.3800979 1.0770065 1.0324675 0.7938437 0.8247978
1.4321708 1.3908441 1.3741425 1.0668069 1.0418361 0.7969669
Average 1.44445177 1.3905291 1.3771202 1.0719067 1.0371518 0.7954053 0.8120659

Forecasts
Period Unadjusted Seasonal Adjusted
37 326.361311 1.4444518 471.41317
38 327.221773 1.3905291 455.01139
39 328.082236 1.3771202 451.80867
40 328.942698 1.0719067 352.59589
41 329.803161 1.0371518 342.05594
42 330.663623 0.7954053 263.0116
43 331.524086 0.8120659 269.21939
44 332.384548 0.7188778 238.94386
45 333.245011 0.6662511 222.02485
46 334.105473 0.7460066 249.24488
47 334.965936 0.8899179 298.0922
48 335.826398 1.031788 346.50165
 Forecasts and Error Analysis
UnadjustedAdjusted Error |Error| Error^2 Abs Pct Err
295.38466 426.6689 11.331105 11.331105 128.39394 02.59%
296.24512 411.93745 8.0625478 8.0625478 65.004677 01.92%
297.10559 409.1501 4.8499032 4.8499032 23.521561 01.17%
297.96605 319.39181 -1.39181 1.3918105 1.9371364 00.44%
298.82651 309.92845 -3.928453 3.9284526 15.43274 01.28%
299.68697 238.3726 1.6273958 1.6273958 2.6484172 00.68%
300.54744 244.06431 -4.064313 4.0643132 16.518642 01.69%
301.4079 216.67544 -0.675438 0.6754379 0.4562164 00.31%
302.26836 201.38662 -3.38662 3.3866202 11.469196 01.71%
303.12882 226.1361 -1.136096 1.1360963 1.2907148 00.50%
303.98929 270.52552 -0.525521 0.5255209 0.2761722 00.19%
304.84975 314.54031 0.4596857 0.4596857 0.2113109 00.15%
305.71021 441.58365 2.4163456 2.4163456 5.8387259 00.54%
306.57067 426.29543 -1.29543 1.2954299 1.6781385 00.30%
307.43114 423.36962 -0.36962 0.3696203 0.1366192 00.09%
308.2916 330.45984 0.5401628 0.5401628 0.2917759 00.16%
309.15206 320.63762 -2.637616 2.6376156 6.9570158 00.83%
310.01252 246.5856 -1.585601 1.5856015 2.514132 00.65%
310.87299 252.44934 2.5506599 2.5506599 6.5058659 01.00%
311.73345 224.09825 -1.098246 1.0982464 1.2061452 00.49%
312.59391 208.26603 1.7339708 1.7339708 3.0066549 00.83%
313.45437 233.83902 -0.839025 0.8390247 0.7039624 00.36%
314.31484 279.71441 -1.714413 1.7144133 2.939213 00.62%
315.1753 325.19409 -3.194093 3.1940932 10.202231 00.99%
316.03576 456.49841 -6.498414 6.4984137 42.229381 01.44%
316.89622 440.65341 -2.653407 2.6534075 7.0405713 00.61%
317.75669 437.58914 -3.589144 3.5891439 12.881954 00.83%
318.61715 341.52786 -3.527864 3.5278639 12.445824 01.04%
319.47761 331.34678 -0.346779 0.3467785 0.1202554 00.10%
320.33807 254.7986 -0.798599 0.7985987 0.6377599 00.31%
321.19854 260.83437 3.165633 3.165633 10.021232 01.20%
322.059 231.52105 -0.521055 0.5210549 0.2714983 00.23%
322.91946 215.14544 8.8545619 8.8545619 78.403267 03.95%
323.77992 241.54195 1.4580469 1.4580469 2.1259008 00.60%
324.64039 288.90331 0.0966942 0.0966942 0.0093498 00.03%
325.50085 335.84787 -0.847872 0.8478721 0.7188871 00.25%
Total 0.5212828 93.772142 476.04708 30.11%
0.0144801 2.6047817 13.22353 00.84%
Bias MAD MSE MAPE
SE 4.6517205
Season 8 Season 9 Season 10 Season 11 Season 12
0.718304 0.6571705 0.7445195 0.8903545 1.0363263
0.7194515 0.6753316 0.7474937 0.8894814 1.0272498

0.7188778 0.6662511 0.7460066 0.8899179 1.031788

Forecasting Trend adjusted exponential smoothing
Enter
Enter alpha
alpha and
and beta
beta (between
(between 00 andand 1),
1), enter
enter the
the past
past demands
demands in in the
the shaded
shaded column
column then
then enter
enter aa
starting
starting forecast.
forecast. IfIf the
the starting
starting forecast
forecast isis not
not in
in the
the first
first period
period then
then delete
delete the
the error
error analysis
analysis for
for all
all rows
rows
above the starting forecast.
above the starting forecast.

Alpha
Beta
Data Forecasts and Error Analysis

Forecast
Smoothed Smoothed Including
Period Demand Forecast, Ft Trend, Tt Trend, FITt Error Absolute
Period 1 0 0 0 0
Period 2 0 0 0 0 0
Period 3 0 0 0 0 0
Period 4 0 0 0 0 0
Period 5 0 0 0 0 0
Period 6 0 0 0 0 0
Period 7 0 0 0 0 0
Period 8 0 0 0 0 0
Next period 0 0 0
Total 0 0
Average 0 0
Bias MAD
SE
 Abs Pct
Squared Err
0 #DIV/0!
0 #DIV/0!
0 #DIV/0!
0 #DIV/0!
0 #DIV/0!
0 #DIV/0!
0 #DIV/0!
0 #DIV/0! Forecasting
1
0 #DIV/0! 0.9
0 #DIV/0! 0.8
MSE MAPE
0.7
0
0.6
0.5
Value

0.4
0.3
0.2
0.1
0
1 2 3 4 5 6 7 8
Time

Demand Smoothed Forecast, Ft

7 8
KATE WALSH ASSOCIATES
Forecasting Exponential smoothing
Enter
Enter alpha
alpha (between
(between 00 and
and 1),1), enter
enter thethe past
past demands
demands in in the
the shaded
shaded column
column thenthen enter
enter aa starting
starting forecast.
forecast. IfIf
the
the starting
starting forecast
forecast isis not
not in
in the
the first
first period
period then
then delete
delete the
the error
error analysis
analysis for
for all
all rows
rows above
above thethe starting
starting
forecast.
forecast.

Alpha 0.1
Data Forecasts and Error Analysis
Period Demand Forecast Error Absolute Squared
Period 1 70 65 5 5 25
Period 2 68.5 65.5 3 3 9
Period 3 64.8 65.8 -1 1 1
Period 4 71.7 65.7 6 6 36
Period 5 71.3 66.3 5 5 25
Period 6 72.8 66.8 6 6 36
Total 24 26 132
Average 4 4.3333333 22
Bias MAD MSE
SE 5.7445626
Next period 67.4
DISCUSSION
5.29: Using exponential smoothing forecast for August's income is $67,400.
ng
ing forecast.
forecast. IfIf
starting
starting
Forecasting
74

72
Abs Pct Err
07.14% 70
04.38%
68
01.54%
Value

08.37% 66
07.01%
64
0.0824175824
36.69% 62
06.11%
60
MAPE 1 2 3 4 5
Time

70 65
KATE WALSH ASSOCIATES

Forecasting Exponential smoothing

Alpha 0.3
Data Forecasts and Error Analysis
Period Demand Forecast Error Absolute Squared
MONTH 1 70 65 5 5 25
MONTH 2 68.5 66.5 2 2 4
MONTH 3 64.8 67.1 -2.3 2.3 5.29
MONTH 4 71.7 66.41 5.29 5.29 27.9841
MONTH 5 71.3 67.997 3.303 3.303 10.909809
MONTH 6 72.8 68.9879 3.8121 3.8121 14.532106
Total 17.1051 21.7051 87.716015
Average 2.85085 3.6175167 14.619336
Bias MAD MSE
SE 4.6828414
Next period 70.13153
DISCUSSION
5.30: Using alpha of 0.1 ,MAD value is 4.333 while using alpha of 0.3 ,MAD value is 3.618. Based on this
using alpha of 0.3 provides a better forecast since it has a lower MAD value.
 Forecasting
74

72

70

Abs Pct Err 68

Value

07.14% 66
02.92%
03.55% 64
07.38% 62
04.63%
0.052364011 60
1 2 3 4 5
30.86%
05.14% Time
MAPE
70 65

ue is 3.618. Based on this

Enter
Enter alpha
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past demands
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the shaded
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enter aa starting
starting forecast.
forecast. IfIf
the
the starting
starting forecast
forecast isis not
not in
in the
the first
first period
period then
then delete
delete the
the error
error analysis
analysis for
for all
all rows
rows above
above thethe starting
starting
forecast.
forecast.
nn then
then enter
enter aa starting
starting forecast.
forecast. IfIf
all
all rows
rows above
above thethe starting
starting