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Forecasting with Index

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Pages 2
Forecasting with Indices
Beverly Morris
University of Phoenix
Quantitative Reasoning for Business
501
Dr. Albert Smothers
September 27, 2012

Summer Historical Inventory Data
To determine the index to start the process the average of the first year need to be identified. Then, to identify the index the monthly average of the four years is dividing the average. The formula that can be used to determine the forecast is formula: y = 2756.6x +35458=49241. Multiply the monthly index by 49241 to determine the 5th year forecast.

Summer Historical Inventory Data | | | | | | Typical Seasonal Demand for Summer Highs | | | | | Actual Demands (in units) | | | | | | | Month | Y1 | Y2 | Y3 | Y4 | Avg. | Index | Forecast (Y5) | | 1 | 18,000 | 45,100 | 59,800 | 35,500 | 39,600 | 94 | 46,042 | | 2 | 19,800 | 46,530 | 30,740 | 51,250 | 37,080 | 87 | 43,113 | | 3 | 15,700 | 22,100 | 47,800 | 34,400 | 30,000 | 70 | 34,880 | | 4 | 53,600 | 41,350 | 73,890 | 68,000 | 59,210 | 139 | 68,840 | | 5 | 83,200 | 46,000 | 60,200 | 68,100 | 64,375 | 152 | 74,847 | | 6 | 72,900 | 41,800 | 55,200 | 61,100 | 57,750 | 136 | 67,146 | | 7 | 55,200 | 39,800 | 32,180 | 62,300 | 47,370 | 111 | 55,078 | | 8 | 57,350 | 64,100 | 38,600 | 66,500 | 56,638 | 133 | 65,851 | | 9 | 15,400 | 47,600 | 25,020 | 31,400 | 29,855 | 70 | 34,713 | | 10 | 27,700 | 43,050 | 51,300 | 36,500 | 39,638 | 94 | 46,087 | | 11 | 21,400 | 39,300 | 31,790 | 16,800 | 27,323 | 64 | 31,768 | | 12 | 17,100 | 10,300 | 31,100 | 18,900 | 19,350 | 45 | 22,497 | | Total | 457,350 | 487,030 | 537,620 | 550,750 | 508,188 | 46,042 | | | | | | | | | | | | Mon/Avg | 381,125 | 40,586 | 44,802 | 45,896 | 42,349 | | | |

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