DISCUSSION QUESTIONS AND PROBLEMS 185

7. When comparing several forecasting models to determine 12. If the seasonal index for January is 0.80, then
which one best fits a particular set of data, the model that a. January sales tend to be 80% higher than an average
should be selected is the one month.
a. with the highest MSE. b. January sales tend to be 20% higher than an average
b. with the MAD closest to 1. month.
c. with a bias of 0. c. January sales tend to be 80% lower than an average
d. with the lowest MAD. month.
8. In exponential smoothing, if you wish to give a d. January sales tend to be 20% lower than an average
significant weight to the most recent observations, then month.
the smoothing constant should be 13. If both trend and seasonal components are present in a
a. close to 0. time-series, then the seasonal indices
b. close to 1. a. should be computed based on an overall average.
c. close to 0.5. b. should be computed based on CMAs.
d. less than the error. c. will all be greater than 1.
9. A trend equation is a regression equation in which d. should be ignored in developing the forecast.
a. there are multiple independent variables. 14. Which of the following is used to alert the user of a fore-
b. the intercept and the slope are the same. casting model that a significant error occurred in one of
c. the dependent variable is time. the periods?
d. the independent variable is time. a. a seasonal index
10. Sales for a company are typically higher in the summer b. a smoothing constant
months than in the winter months. This variation would c. a tracking signal
be called a d. a regression coefficient
a. trend. 15. If the multiplicative decomposition model is used to fore-
b. seasonal factor. cast daily sales for a retail store, how many seasons will
c. random factor. there be?
d. cyclical factor. a. 4
11. A naïve forecast for monthly sales is equivalent to b. 7
a. a one-month moving average model. c. 12
b. an exponential smoothing model with  = 0. d. 365
c. a seasonal model in which the seasonal index is 1.
d. none of the above.

Discussion Questions and Problems

Discussion Questions 5-9 Explain how the number of season is determined
when forecasting with a seasonal component.
5-1 Describe briefly the steps used to develop a forecast-
ing system. 5-10 A seasonal index may be less than one, equal to one,
or greater than one. Explain what each of these val-
5-2 What is a time-series forecasting model?
ues would mean.
5-3 What is the difference between a causal model and a
5-11 Explain what would happen if the smoothing con-
time-series model?
stant in an exponential smoothing model was equal
5-4 What is a qualitative forecasting model, and when is to zero. Explain what would happen if the smooth-
it appropriate? ing constant was equal to one.
5-5 What are some of the problems and drawbacks of 5-12 Explain when a CMA (rather than an overall aver-
the moving average forecasting model? age) should be used in computing a seasonal index.
5-6 What effect does the value of the smoothing con- Explain why this is necessary.
stant have on the weight given to the past forecast
and the past observed value? Problems
5-7 Describe briefly the Delphi technique. 5-13 Develop a four-month moving average forecast for
5-8 What is MAD, and why is it important in the selec- Wallace Garden Supply and compute the MAD.
tion and use of forecasting models?

Note: means the problem may be solved with QM for Windows; means the problem may be
solved with Excel QM; and means the problem may be solved with QM for Windows and/or Excel QM.
186 CHAPTER 5 • FORECASTING

A three-month moving average forecast was devel- The sales manager had predicted, before the busi-
oped in the section on moving averages in Table 5.3. ness started, that year 1’s sales would be 410 air con-
5-14 Using MAD, determine whether the forecast in ditioners. Using exponential smoothing with a
Problem 5-13 or the forecast in the section concern- weight of  = 0.30, develop forecasts for years 2
ing Wallace Garden Supply is more accurate. through 6.
5-15 Data collected on the yearly demand for 50-pound 5-20 Using smoothing constants of 0.6 and 0.9, develop
bags of fertilizer at Wallace Garden Supply are forecasts for the sales of Cool-Man air conditioners
shown in the following table. Develop a 3-year mov- (see Problem 5-19).
ing average to forecast sales. Then estimate demand 5-21 What effect did the smoothing constant have on the
again with a weighted moving average in which forecast for Cool-Man air conditioners? (See Prob-
sales in the most recent year are given a weight of 2 lems 5-19 and 5-20.) Which smoothing constant
and sales in the other 2 years are each given a weight gives the most accurate forecast?
of 1. Which method do you think is best? 5-22 Use a three-year moving average forecasting model
to forecast the sales of Cool-Man air conditioners
DEMAND FOR FERTILIZER (see Problem 5-19).
YEAR (1,000S OF BAGS) 5-23 Using the trend projection method, develop a fore-
1 4 casting model for the sales of Cool-Man air condi-
2 6 tioners (see Problem 5-19).
3 4
5-24 Would you use exponential smoothing with a
smoothing constant of 0.3, a 3-year moving average,
4 5 or a trend to predict the sales of Cool-Man air condi-
5 10 tioners? Refer to Problems 5-19, 5-22, and 5-23.
6 8 5-25 Sales of industrial vacuum cleaners at R. Lowenthal
7 7 Supply Co. over the past 13 months are as follows:
8 9
SALES ($1,000s) MONTH SALES ($1,000s) MONTH
9 12
11 January 14 August
10 14
14 February 17 September
11 15
16 March 12 October

5-16 Develop a trend line for the demand for fertilizer in 10 April 14 November
Problem 5-15, using any computer software. 15 May 16 December
5-17 In Problems 5-15 and 5-16, three different forecasts 17 June 11 January
were developed for the demand for fertilizer. These 11 July
three forecasts are a 3-year moving average, a
weighted moving average, and a trend line. Which
one would you use? Explain your answer. (a) Using a moving average with three periods, de-
5-18 Use exponential smoothing with a smoothing con- termine the demand for vacuum cleaners for next
stant of 0.3 to forecast the demand for fertilizer February.
given in Problem 5-15. Assume that last period’s (b) Using a weighted moving average with three pe-
forecast for year 1 is 5,000 bags to begin the proce- riods, determine the demand for vacuum clean-
dure. Would you prefer to use the exponential ers for February. Use 3, 2, and 1 for the weights
smoothing model or the weighted average model de- of the most recent, second most recent, and third
veloped in Problem 5-15? Explain your answer. most recent periods, respectively. For example,
if you were forecasting the demand for February,
5-19 Sales of Cool-Man air conditioners have grown
November would have a weight of 1, December
steadily during the past 5 years:
would have a weight of 2, and January would
have a weight of 3.
YEAR SALES (c) Evaluate the accuracy of each of these methods.
1 450 (d) What other factors might R. Lowenthal consider
2 495 in forecasting sales?
3 518
4 563
5 584
6 ?
 DISCUSSION QUESTIONS AND PROBLEMS 187

5-26 Passenger miles flown on Northeast Airlines, a com-

MONTH INCOME ($1,000S)
muter firm serving the Boston hub, are as follows
for the past 12 weeks: February 70.0
March 68.5

ACTUAL PASSENGER ACTUAL PASSENGER April 64.8

WEEK MILES (1,000S) WEEK MILES (1,000S) May 71.7
1 17 7 20 June 71.3
2 21 8 18 July 72.8
3 19 9 22
4 23 10 20 Use exponential smoothing to forecast August’s in-
5 18 11 15 come. Assume that the initial forecast for February
6 16 12 22 is $65,000. The smoothing constant selected is
 = 0.1.
5-30 Resolve Problem 5-29 with  = 0.3. Using MAD,
(a) Assuming an initial forecast for week 1 of which smoothing constant provides a better forecast?
17,000 miles, use exponential smoothing to 5-31 A major source of revenue in Texas is a state sales
compute miles for weeks 2 through 12. Use tax on certain types of goods and services. Data are
 = 0.2. compiled and the state comptroller uses them to
(b) What is the MAD for this model? project future revenues for the state budget. One par-
(c) Compute the RSFE and tracking signals. Are ticular category of goods is classified as Retail
they within acceptable limits? Trade. Four years of quarterly data (in $millions) for
5-27 Emergency calls to Winter Park, Florida’s 911 sys- one particular area of southeast Texas follow:
tem, for the past 24 weeks are as follows:

QUARTER YEAR 1 YEAR 2 YEAR 3 YEAR 4

WEEK CALLS WEEK CALLS WEEK CALLS
1 218 225 234 250
1 50 9 35 17 55
2 247 254 265 283
2 35 10 20 18 40
3 243 255 264 289
3 25 11 15 19 35
4 292 299 327 356
4 40 12 40 20 60
5 45 13 55 21 75
(a) Compute seasonal indices for each quarter based
6 35 14 35 22 50
on a CMA.
7 20 15 25 23 40 (b) Deseasonalize the data and develop a trend line
8 30 16 55 24 65 on the deseasonalized data.
(c) Use the trend line to forecast the sales for each
quarter of year 5.
(a) Compute the exponentially smoothed forecast of (d) Use the seasonal indices to adjust the forecasts
calls for each week. Assume an initial forecast of found in part (c) to obtain the final forecasts.
50 calls in the first week and use  = 0.1. What 5-32 Using the data in Problem 5-31, develop a multiple
is the forecast for the 25th week? regression model to predict sales (both trend and
(b) Reforecast each period using  = 0.6. seasonal components), using dummy variables to in-
(c) Actual calls during the 25th week were 85. corporate the seasonal factor into the model. Use
Which smoothing constant provides a superior this model to predict sales for each quarter of the
forecast? next year. Comment on the accuracy of this model.
5-28 Using the 911 call data in Problem 5-27, forecast 5-33 Trevor Harty, an avid mountain biker, always wanted
calls for weeks 2 through 25 using  = 0.9. Which to start a business selling top-of-the-line mountain
is best? (Again, assume that actual calls in week 25 bikes and other outdoor supplies. A little over
were 85 and use an initial forecast of 50 calls.) 6 years ago, he and a silent partner opened a store
5-29 Consulting income at Kate Walsh Associates for the called Hale and Harty Trail Bikes and Supplies.
period February–July has been as follows: Growth was rapid in the first 2 years, but since that
188 CHAPTER 5 • FORECASTING

time, growth in sales has slowed a bit, as expected.

YEAR DJIA YEAR 2 DJIA
The quarterly sales (in $1,000s) for the past 4 years
are shown in the table below: 2010 10,431 2000 11,502
2009 8,772 1999 9,213
YEAR 1 YEAR 2 YEAR 3 YEAR 4 2008 13,262 1998 7,908
QUARTER 1 274 282 282 296 2007 12,460 1997 6,448
QUARTER 2 172 178 182 210 2006 10,718 1996 5,117
QUARTER 3 130 136 134 158 2005 10,784 1995 3,834
QUARTER 4 162 168 170 182 2004 10,453 1994 3,754
2003 8,342 1993 3,301
(a) Develop a trend line using the data in the table. 2002 10,022 1992 3,169
Use this to forecast sales for each quarter of 2001 10,791 1991 2,634
year 5. What does the slope of this line indicate?
(b) Use the multiplicative decomposition model to
incorporate both trend and seasonal components 5-38 Using the DJIA data in Problem 5-37, use exponen-
into the forecast. What does the slope of this line tial smooth with trend adjustment to forecast the
indicate? opening DJIA value for 2011. Use  = 0.8 and
 = 0.2. Compare the MSE for this technique with
(c) Compare the slope of the trend line in part a to
the slope in the trend line for the decomposition the MSE for the trend line.
model that was based on the deseasonalized 5-39 Refer to the DJIA data in Problem 5-37.
sales figures. Discuss why these are so different (a) Use an exponential smoothing model with a
and explain which one is best to use. smoothing constant of 0.4 to predict the opening
5-34 The unemployment rates in the United States during DJIA index value for 2011. Find the MSE for this.
a 10-year period are given in the following table. (b) Use QM for Windows or Excel and find the
Use exponential smoothing to find the best forecast smoothing constant that would provide the low-
for next year. Use smoothing constants of 0.2, 0.4, est MSE.
0.6, and 0.8. Which one had the lowest MAD? 5-40 The following table gives the average monthly ex-
change rate between the U.S. dollar and the euro for
2009. It shows that 1 euro was equivalent to 1.324
YEAR 1 2 3 4 5 6 7 8 9 10 U.S. dollars in January 2009. Develop a trend line
Unemployment 7.2 7.0 6.2 5.5 5.3 5.5 6.7 7.4 6.8 6.1 that could be used to predict the exchange rate for
rate (%) 2010. Use this model to predict the exchange rate for
January 2010 and February 2010.
5-35 Management of Davis’s Department Store has used
time-series extrapolation to forecast retail sales for MONTH EXCHANGE RATE
the next four quarters. The sales estimates are January 1.324
$100,000, $120,000, $140,000, and $160,000 for
February 1.278
the respective quarters before adjusting for season-
ality. Seasonal indices for the four quarters have March 1.305
been found to be 1.30, 0.90, 0.70, and 1.10, respec- April 1.320
tively. Compute a seasonalized or adjusted sales May 1.363
forecast.
June 1.402
5-36 In the past, Judy Holmes’s tire dealership sold an av-
July 1.409
erage of 1,000 radials each year. In the past two
years, 200 and 250, respectively, were sold in fall, August 1.427
350 and 300 in winter, 150 and 165 in spring, and September 1.456
300 and 285 in summer. With a major expansion October 1.482
planned, Judy projects sales next year to increase to
November 1.491
1,200 radials. What will the demand be each season?
5-37 The following table provides the Dow Jones Indus- December 1.461
trial Average (DJIA) opening index value on the
first working day of 1991–2010: 5-41 For the data in Problem 5-40, develop an exponen-
Develop a trend line and use it to predict the open- tial smoothing model with a smoothing constant of
ing DJIA index value for years 2011, 2012, and 0.3. Using the MSE, compare this with the model in
2013. Find the MSE for this model. Problem 5-40.
 CASE STUDY 189

Internet Homework Problems

See our Internet home page, at www.pearsonhighered.com/render, for additional homework
problems, Problems 5-42 to 5-50.

Case Study
Forecasting Attendance at SWU Football Games
Southwestern University (SWU), a large state college in built in 1953, has seating for 54,000 fans. The following table
Stephenville, Texas, 30 miles southwest of the Dallas/Fort indicates attendance at each game for the past six years.
Worth metroplex, enrolls close to 20,000 students. In a typical One of Pitterno’s demands upon joining SWU had been a
town–gown relationship, the school is a dominant force in the stadium expansion, or possibly even a new stadium. With atten-
small city, with more students during fall and spring than per- dance increasing, SWU administrators began to face the issue
manent residents. head-on. Pitterno had wanted dormitories solely for his athletes
A longtime football powerhouse, SWU is a member of the in the stadium as an additional feature of any expansion.
Big Eleven conference and is usually in the top 20 in college SWU’s president, Dr. Marty Starr, decided it was time for
football rankings. To bolster its chances of reaching the elusive his vice president of development to forecast when the existing
and long-desired number-one ranking, in 2005 SWU hired the stadium would “max out.” He also sought a revenue projection,
legendary Bo Pitterno as its head coach. Although the number- assuming an average ticket price of $20 in 2011 and a 5% in-
one ranking remained out of reach, attendance at the five Satur- crease each year in future prices.
day home games each year increased. Prior to Pitterno’s arrival,
attendance generally averaged 25,000 to 29,000 per game. Sea- Discussion Questions
son ticket sales bumped up by 10,000 just with the announce-
1. Develop a forecasting model, justify its selection over
ment of the new coach’s arrival. Stephenville and SWU were
other techniques, and project attendance through 2012.
ready to move to the big time!
2. What revenues are to be expected in 2011 and 2012?
The immediate issue facing SWU, however, was not
3. Discuss the school’s options.
NCAA ranking. It was capacity. The existing SWU stadium,

Southwestern University Football Game Attendance, 2005–2010

2005 2006 2007

GAME ATTENDEES OPPONENT ATTENDEES OPPONENT ATTENDEES OPPONENT
1 34,200 Baylor 36,100 Oklahoma 35,900 TCU
2* 39,800 Texas 40,200 Nebraska 46,500 Texas Tech
3 38,200 LSU 39,100 UCLA 43,100 Alaska
4** 26,900 Arkansas 25,300 Nevada 27,900 Arizona
5 35,100 USC 36,200 Ohio State 39,200 Rice

2008 2009 2010

GAME ATTENDEES OPPONENT ATTENDEES OPPONENT ATTENDEES OPPONENT
1 41,900 Arkansas 42,500 Indiana 46,900 LSU
2* 46,100 Missouri 48,200 North Texas 50,100 Texas
3 43,900 Florida 44,200 Texas A&M 45,900 Prairie View A&M
4** 30,100 Miami 33,900 Southern 36,300 Montana
5 40,500 Duke 47,800 Oklahoma 49,900 Arizona State

*Homecoming games
**During the fourth week of each season, Stephenville hosted a hugely popular southwestern crafts festival. This event brought tens of thousands of
tourists to the town, especially on weekends, and had an obvious negative impact on game attendance.
Source: J. Heizer and B. Render. Operations Management, 6th ed. Upper Saddle River, NJ: Prentice Hall, 2001, p. 126.
190 CHAPTER 5 • FORECASTING

Case Study
Forecasting Monthly Sales
For years The Glass Slipper restaurant has operated in a resort shore. They also knew that hiring the right manager would al-
community near a popular ski area of New Mexico. The restau- low James and Deena the time to begin a semi-retirement in a
rant is busiest during the first 3 months of the year, when the corner of paradise.
ski slopes are crowded and tourists flock to the area. To make this happen, James and Deena would have to sell
When James and Deena Weltee built The Glass Slipper, The Glass Slipper for the right price. The price of the business
they had a vision of the ultimate dining experience. As the view would be based on the value of the property and equipment, as
of surrounding mountains was breathtaking, a high priority was well as projections of future income. A forecast of sales for the
placed on having large windows and providing a spectacular next year is needed to help in the determination of the value of
view from anywhere inside the restaurant. Special attention was the restaurant. Monthly sales for each of the past 3 years are
also given to the lighting, colors, and overall ambiance, result- provided in Table 5.14.
ing in a truly magnificent experience for all who came to enjoy
gourmet dining. Since its opening, The Glass Slipper has devel- Discussion Questions
oped and maintained a reputation as one of the “must visit”
1. Prepare a graph of the data. On this same graph, plot a
places in that region of New Mexico.
12-month moving average forecast. Discuss any apparent
While James loves to ski and truly appreciates the moun-
trend and seasonal patterns.
tains and all that they have to offer, he also shares Deena’s
2. Use regression to develop a trend line that could be used
dream of retiring to a tropical paradise and enjoying a more
to forecast monthly sales for the next year. Is the slope of
relaxed lifestyle on the beach. After some careful analysis of
this line consistent with what you observed in question 1?
their financial condition, they knew that retirement was many
If not, discuss a possible explanation.
years away. Nevertheless, they were hatching a plan to bring
3. Use the multiplicative decomposition model on these
them closer to their dream. They decided to sell The Glass
data. Use this model to forecast sales for each month of
Slipper and open a bed and breakfast on a beautiful beach in
the next year. Discuss why the slope of the trend equation
Mexico. While this would mean that work was still in their
with this model is so different from that of the trend equa-
future, they could wake up in the morning to the sight of the
tion in question 2.
palm trees blowing in the wind and the waves lapping at the

TABLE 5.14 MONTH 2008 2009 2010

Monthly Revenue
(in $1,000s) January 438 444 450
February 420 425 438
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 198 210 224
October 225 233 243
November 270 278 289
December 315 322 335

Internet Case Study

See our Internet home page, at www.pearsonhighered.com/render, for the additional case study
on Akron Zoological Park. This case involves forecasting attendance at Akron’s zoo.
 APPENDIX 5.1 FORECASTING WITH QM FOR WINDOWS 191

Bibliography
Berenson, Mark L., David M. Levine, and Timothy C. Kriehbiel. Business Heizer, J., and B. Render. Operations Management, 9th ed. Upper Saddle
Statistics: Concepts and Applications, 10th ed. Upper Saddle River, NJ: River, NJ: Prentice Hall, 2008.
Prentice Hall, 2006. Hyndman, Rob J. “The Interaction Between Trend and Seasonality,”
Billah, Baki, Maxwell L. King Ralph D. Snyder, and Anne B. Koehler. “Expo- International Journal of Forecasting 20, 4 (October–December 2004):
nential Smoothing Model Selection for Forecasting,” International Jour- 561–563.
nal of Forecasting 22, 2, (April–June 2006): 239–247. Hyndman, Rob J., and Anne B. Koehler. “Another Look at Measures of Fore-
Black, Ken. Business Statistics: For Contemporary Decision Making, 6th ed. cast Accuracy,” International Journal of Forecasting 22, 4 (October
John Wiley & Sons, Inc., 2009. 2006): 679–688.
Diebold, F. X. Elements of Forecasting, 2nd ed. Cincinnati: South-Western Li, X. “An Intelligent Business Forecaster for Strategic Business Planning,”
College Publishing, 2001. Journal of Forecasting 18, 3 (May 1999): 181–205.
Gardner, Everette Jr. “Exponential Smoothing: The State of the Art—Part II,” Meade, Nigel. “Evidence for the Selection of Forecasting Methods,” Journal
International Journal of Forecasting 22, 4 (October 2006): 637–666. of Forecasting 19, 6 (November 2000): 515–535.
Granger, Clive W., and J. M. Hashem Pesaran. “Economic and Statistical Snyder, Ralph D., and Roland G. Shami. “Exponential Smoothing of Seasonal
Measures of Forecast Accuracy,” Journal of Forecasting, 19, 7 (Decem- Data: A Comparison,” Journal of Forecasting 20, 3 (April 2001):
ber 2000): 537–560. 197–202.
Hanke, J. E., and D. W. Wichern. Business Forecasting, 9th ed. Upper Saddle Yurkiewicz, J. “Forecasting Software Survey,” OR/MS Today 35, 3 (August
River, NJ: Prentice Hall, 2009. 2008): 54–63.

Appendix 5.1 Forecasting with QM for Windows

In this section, we look at our other forecasting software package, QM for Windows. QM for
Windows can project moving averages (both simple and weighted), do simple and trend-
adjusted exponential smoothing, handle least squares trend projection, solve regression prob-
lems, and use the decomposition method.
To develop forecasts in QM for Windows, select Module on the toolbar and select Forecasting.
Then either click the new document icon or click File—New—Time Series Analysis to enter a new
time series problem. Specify the number of past observations and enter a title, if desired.
To illustrate QM for Windows, we will use the Port of Baltimore data from Table 5.5. The
number of past observations was eight in that example. When you enter those data, the screen
shown in Program 5.8A opens and allows for data input. Once the data is entered, click the

PROGRAM 5.8A
QM for Windows Click the arrow in the Method window to select the desired methods.
Forecasting Methods

Enter the data.

You can change these names by typing over them.

192 CHAPTER 5 • FORECASTING

arrow on the message box to see all the options and select the one desired. In selecting exponen-
tial smoothing for this example, a box appears where  (alpha) may be entered and a column
where any previous forecasts (if available) may be entered, as shown in Program 5.8B. With
other forecasting methods, other types of input boxes may appear. Click the Solve button, and
the Forecasting Results screen appears, as shown in Program 5.8C. If you want to try a different
value for , click Edit to return to the input screen, where you can change . Note that you can
enter an initial forecast if desired, but the error analysis will begin with the first forecast gener-
ated by the computer. Any forecasts entered by the user are ignored in the error analysis.
Notice that additional output, including detailed results of the procedure and a graph, are
available from the Window option in the toolbar once the problem has been solved. With expo-
nential smoothing, one output is called Errors as a function of alpha. This will display the MAD
and MSE for all values of  from 0 to 1, in increments of 0.01. You can simply scroll down this
screen to find the value for  that minimizes the MAD or MSE.
For another example, we will use the decomposition method on the Turner Industries exam-
ple from Table 5.10. Enter a time-series problem with 12 past periods of data and select
Multiplicative Decomposition under Method. When this is done, additional input is needed, so
indicate that there are four seasons, select Centered Moving Average as the basis for smoothing,
and specify that the seasonal factors should not be rescaled, as shown in Program 5.9. This out-
put screen provides both the unadjusted forecasts found using the trend equation on the desea-
sonalized data and the final or adjusted forecasts, which are found by multiplying the unadjusted
forecast by the seasonal factor or index. Additional details can be seen by selecting Details and
Error Analysis under Window.

PROGRAM 5.8B
Exponential Smoothing Click Solve.
in the Port of Baltimore
Example with QM for
Windows

After exponential smoothing is selected,

the option of selecting alpha appears.
Input the desired value. Other options
appear for other forecasting methods.

You can input the initial forecast,

if there is one. Otherwise, it will
be assumed to be the same as the
actual value (180 in this example).
 APPENDIX 5.1 FORECASTING WITH QM FOR WINDOWS 193

PROGRAM 5.8C Other output options are available

Exponential Smoothing under Window on the toolbar.
in the Port of Baltimore
Output with QM for
Windows
Watch for notes such as this one,
which specifies that the error
analysis begins with the first period
with a forecast that was not
entered by the user.

A graph is available for all

time-series methods.

The forecast for the next

period is here.

PROGRAM 5.9 When data were input, 4, Centered Moving

QM for Windows Average, and Rescale were all specified. If
the ‘Do not rescale’ option is selected, there
Decomposition Output
will be slight differences in the output.
for the Turner Industries
Example

Additional output, including a graph

and detailed analysis, is available
from the Window drop-down menu.

Seasonal indices are found here. The

unadjusted forecast is multiplied by
the appropriate seasonal index to get
the adjusted (final) forecast.

The trend equation is here. The unadjusted forecasts come from this.