Ch. 5-demand-forecasting(2)
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Ch. 5-demand-forecasting(2) Presentation Transcript

  • 1. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 1
  • 2. Qualitative Forecasts • Survey Techniques – Planned Plant and Equipment Spending – Expected Sales and Inventory Changes – Consumers’ Expenditure Plans • Opinion Polls – Business Executives – Sales Force – Consumer IntentionsPowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 2
  • 3. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 3
  • 4. Time-Series Analysis • Secular Trend – Long-Run Increase or Decrease in Data • Cyclical Fluctuations – Long-Run Cycles of Expansion and Contraction • Seasonal Variation – Regularly Occurring Fluctuations • Irregular or Random InfluencesPowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 4
  • 5. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 5
  • 6. Trend Projection • Linear Trend: St = S0 + b t b = Growth per time period • Constant Growth Rate St = S0 (1 + g)t g = Growth rate • Estimation of Growth Rate lnSt = lnS0 + t ln(1 + g)PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 6
  • 7. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 7
  • 8. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 8
  • 9. Seasonal Variation Ratio to Trend Method Actual Ratio = Trend Forecast Seasonal Average of Ratios for Adjustment = Each Seasonal Period Adjusted Trend Seasonal Forecast = Forecast AdjustmentPowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 9
  • 10. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 10
  • 11. Seasonal Variation Ratio to Trend Method: Example Calculation for Quarter 1 Trend Forecast for 1996.1 = 11.90 + (0.394)(17) = 18.60 Seasonally Adjusted Forecast for 1996.1 = (18.60)(0.8869) = 16.50 Trend Year Forecast Actual Ratio 1992.1 12.29 11.00 0.8950 1993.1 13.87 12.00 0.8652 1994.1 15.45 14.00 0.9061 1995.1 17.02 15.00 0.8813 Seasonal Adjustment = 0.8869PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 11
  • 12. Moving Average Forecasts Forecast is the average of data from w periods prior to the forecast data point. w At i Ft i 1 wPowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 12
  • 13. Exponential Smoothing Forecasts Forecast is the weighted average of of the forecast and the actual value from the prior period. Ft 1 wAt (1 w) Ft 0 w 1PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 13
  • 14. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 14
  • 15. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 15
  • 16. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 16
  • 17. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 17
  • 18. Root Mean Square Error Measures the Accuracy of a Forecasting Method ( At Ft ) 2 RMSE nPowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 18
  • 19. Barometric Methods • National Bureau of Economic Research • Department of Commerce • Leading Indicators • Lagging Indicators • Coincident Indicators • Composite Index • Diffusion IndexPowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 19
  • 20. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 20
  • 21. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 21
  • 22. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 22
  • 23. Econometric Models Single Equation Model of the Demand for Cereal (Good X) QX = a0 + a1PX + a2Y + a3N + a4PS + a5PC + a6A + e QX = Quantity of X PS = Price of Muffins PX = Price of Good X PC = Price of Milk Y = Consumer Income A = Advertising N = Size of Population e = Random ErrorPowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 23
  • 24. Econometric Models Multiple Equation Model of GNP Ct a1 b1GNP u1t t It a2 b2 t 1 u2t GNPt Ct It Gt Reduced Form Equation a1 a2 b2 t 1 Gt GNPt b1 1 b1 1 1 b1PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 24
  • 25. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 25
  • 26. Input-Output Forecasting Three-Sector Input-Output Flow Table Producing Industry Supplying Final Industry A B C Demand Total A 20 60 30 90 200 B 80 90 20 110 300 C 40 30 10 20 100 Value Added 60 120 40 220 Total 200 300 100 220PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 26
  • 27. Input-Output Forecasting Direct Requirements Matrix Direct = Input Requirements Requirements Column Total Producing Industry Supplying Industry A B C A 0.1 0.2 0.3 B 0.4 0.3 0.2 C 0.2 0.1 0.1PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 27
  • 28. Input-Output Forecasting Total Requirements Matrix Producing Industry Supplying Industry A B C A 1.47 0.51 0.60 B 0.96 1.81 0.72 C 0.43 0.31 1.33PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 28
  • 29. Input-Output Forecasting Total Final Total Requirements Demand Demand Matrix Vector Vector 1.47 0.51 0.60 90 200 0.96 1.81 0.72 110 = 300 0.43 0.31 1.33 20 100PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 29
  • 30. Input-Output Forecasting Revised Input-Output Flow Table Producing Industry Supplying Final Industry A B C Demand Total A 22 62 31 100 215 B 88 93 21 110 310 C 43 31 10 20 104PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 30
  • 31. Chapter 5 AppendixPowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 31
  • 32. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 32
  • 33. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 33
  • 34. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 34
  • 35. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 35
  • 36. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 36
  • 37. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D. Copyright 2007 by Oxford University Press, Inc. (Adapted by OUP India, 2008) Slide 37