Forecasting —Trend Projection using Seasonal Index (SI)
Part 4 of Forecasting by Hand Dr. Alvin Ang
This is part of a series on :
What we are Trying to Do
Step 1: Use Centered Moving Average (CMA) to find Seasonal Irregular Component (SIC)
Step 2: Find the Seasonal Index (SI) and the Adjusted Seasonal Index (ASI)
Step 3: Use Adjusted Seasonal Index (ASI) to De-Seasonalize the Sales
Step 4: Use the De-Seasonalized Sales to Get the Linear Trend Equation
Step 5: Use the Trend Line Equation to Forecast Future Time Periods
Step 6: Multiply the ASI into The Future Time Period to Obtain the Final Answer (the Seasonalized Forecasted Sales Value)
- Since from Step 5: T (@ t = 8) = 147.15
- Presume period t = 8 has ASI (aka Seasonal Factor of 0.9)…
- Then the Actual T = 147.15 x 0.9 = 132.44.
- Thus the Actual Sales at t = 8 (which includes Seasonality) = $132.44
About Dr. Alvin Ang
Dr. Alvin Ang earned his Ph.D., Masters and Bachelor degrees from NTU, Singapore. Previously he was a Principal Consultant (Data Science) as well as an Assistant Professor. He was also 8 years SUSS adjunct lecturer. His focus and interest is in the area of real world data science. Though an operational researcher by study, his passion for practical applications outweigh his academic background He is a scientist, entrepreneur, as well as a personal/business advisor.
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More about him at www.AlvinAng.sg.
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