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Forecasting with Indices
September 12th, 2011
Peter Maddock

Forecasting with Indices
Today I will be using the University of Phoenix Material: Winter Historical Inventory Data to do several things. First I will convert this data into an index; I will also take this data and forecast inventory for the next year, as well as make a graph of this data.
I used the information from the Winter Historical Inventory Data to create an index. The following is the Winter Historical Inventory Data Index.

|               Winter Historical Inventory Data | |
| Typical Seasonal Demand for Winter Highs |
|                   Actual Demand (in units) | |
month | year 1 | year 2 | year 3 | year 4 | |
1 | 55,200 | 39,800 | 32,180 | 62,300 | |
2 | 57,350 | 64,100 | 38,600 | 66,500 | |
3 | 15,400 | 47,600 | 25,020 | 31,400 | |
4 | 27,700 | 43,050 | 51,300 | 36,500 | |
5 | 21,400 | 39,300 | 31,790 | 16,800 | |
6 | 17,100 | 10,300 | 31,100 | 18,900 | |
7 | 18,000 | 45,100 | 59,800 | 35,500 | |
8 | 19,800 | 46,530 | 30,740 | 51,250 | |
9 | 15,700 | 22,100 | 47,800 | 34,400 | |
10 | 53,600 | 41,350 | 73,890 | 68,000 | |
11 | 83,200 | 46,000 | 60,200 | 68,100 | |
12 | 79,200 | 41,800 | 55,200 | 61,100 | |
average | 38,638 | 40,586 | 44,802 | 45,896 | |
 (University of Phoenix,  na) | | | | | |
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The first graph shoes the exact numbers for the Winter Historical Inventory Data; the seconded graph shows the average of actual demand (in units) for the winter data. Looking at this information I will forecast next year’s average of Actual Demand (in units). The Demand has rose continually for the past four years, because of this I will also be forecasting demand to raise further. As you can see; the rise in change between year one and two is greater than that of year three to year four. I am going to predict that next year will be about the same amount of change between the data as the previous year.   I...