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Flashcards in Module 18: Forecasting Deck (8)
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1
Q

What is a past sales pattern an example of?

A

A time series

2
Q

What is a time series?

A

A series of figures or values recorded over time

Graph of a time series is called a histogram

3
Q

What are the main features of a time series?

A

A trend
Seasonal variations
Cyclical variations e.g. economic cycles, longer terms than seasonal
Random variations - unknown factor

4
Q

What is the equation of a time series?

A

Y = T + S
Y is actual time series
T is trend component
S is seasonal component

5
Q

Steps for a forecast?

A
Find trend line
Calculate trend figures
Calc crude seasonal variations
Calc future trend values
Use future trend values and average seasonal variations to calculate forecast
6
Q

What are the methods for finding a trend?

A
Line of best fit drawn by eye
Linear regression
Moving averages
x = time
T = trend figure
X continues to go up so Q1 y2 is number 5
7
Q

Additive model for crude variation?

A

Absolute difference between actual and trend
CSV = Actual - Trend
Average Seasonal Variation

8
Q

Multiplicative model for crude variation?

A

Actual sales as a percentage of trend

CSV = Actual/Trend