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8/4/2019 ARIJIT MONDAL (Final Assignment)
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ARIJIT MONDAL
M.B.A. (2nd Semester, Sec-A, Roll No- 10)
Assignment on Demand Forecasting:
Calculate the Forecasted Sales for the year (2005 to 2010):
For calculating the Forecasted Sales for the year (2005 to 2010), we need to
calculate the following steps:
4-Quarter Moving Average.
Central Moving Average.
Specific Seasonal Index.
Seasonal Index.
Deseasonalized Demand.
Calculation of Trend line (T) parameter.
Cyclical Component (C) Analysis.
Random Component (R) Analysis.
Sales figures in crore Rs.
Year Q1 Q2 Q3 Q4
1998 40 25 15 30
1999 38 26 13 28
2000 13 22 18 33
2001 45 29 14 30
2002 41 26 18 29
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Trend (T) refers to long-term growth or decline in average level ofdemand.Business-cycle(C) refers to large deviation of actual demand values fromexpected (trend line) due to complex environment influences. Randomcomponent (R) is the irregular residual in the demand due to manycomplex random forces in the environment.
Multiplicative Model: Y=T.C.S.R.
Calculation for 4-Quarter Moving Average:
4-quareter moving average is the average of four sales quarters during theperiod.Example:
24.75= (20+32+22+25)/4
23.5= (32+22+25+15)/4
& so on.
Variation Estimation of Actual Demand &4-Quarter Moving Average:
Blue Dots= Actualdemand.
Red Dots= AverageDemand.
** Data collected from table1 forthe graph.
year
Quart
er Sales
4-Qtr Moving
Avg2000 Q1 20
Q2 32
24.75
Q3 22
23.5
Q4 25
21.75
2001 Q1 15
25.25
Q2 2526.75
Q3 36
Q4 31
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Calculation for Central Moving Average:
Central moving average is the average of 4-quarter moving average during
the period.Example:
24.125= (24.75+23.5)
22.625= (23.5+21.75)
& so on..
Variation Estimation of Actual Demand & 4-Quarter Moving Average &Central Moving Average:
Green Dots= Central
Moving Average.
**Data collected from Table1 for
the graph.
yearQuarter Sales
4-QtrMoving Avg
CentralMoving Avg
2000 Q1 20
Q2 32
24.75
Q3 22 24.12523.5
Q4 25 22.625
21.75
2001 Q1 15 23.5
25.25
Q2 25 26
26.75
Q3 36
Q4 31
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Calculation for Specific Seasonal Index:
To calculate Specific Seasonal Index,
Specific Seasonal Index : = (Actual Demand / Central Moving Average.)
Example:
0.912= 22/24.125
1.105= 25/22.625
& So on
Variation Estimation of SpecificSeasonal Index:
**Data collected from Table1 forthe graph.
yearQuarter
Sales
4-QtrMoving Avg
CentralMovingAvg
SpecificSeasonalIndex
2000 Q1 20
Q2 3224.75
Q3 22 24.125 0.912
23.5
Q4 25 22.625 1.105
21.75200
1 Q1 15 23.5 0.638
25.25
Q2 25 26 0.962
26.75
Q3 36
Q4 31
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Calculation for Seasonal Index:
Following process
has to be taken for
calculating of
Seasonal index:
With respective years & quarters, the figures are taken.
Identify the maximum and minimum fluctuations with respectivequarters.
Omit the maximum and minimum figures for each quarter.
Calculation of modified sum.
Calculation of modified mean.
Total of all modified mean of all quarters.
Calculate Adjacent constant (e= 4/total of the modified mean).
Year Q1 Q2 Q3 Q4199
8 0.551.10
5
1999 1.407
0.981 0.562
1.435
2000
0.662
1.053 0.705
1.086
2001
1.463 0.97 0.482
1.066
2002 1.451
0.908
Maximum
fluctuation.
Minimum
fluctuation.
Modifiedsum 2.858
1.951
1.112
2.191
Modifiedmean 1.429
0.976
0.556
1.096
TotalModifiedMean 4.056Adjustmentconstant=
0.986193
Quarter
ModMean
Adjucont.
Seasonalindex
Q11.42
90.98619
33 1.409
Q2
0.97
55
0.98619
33 0.962
Q30.55
60.98619
33 0.548
Q41.09
60.98619
33 1.080
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Use the adjacent constant together with modified mean to calculateseasonal index (SI).
GraphShowing the Seasonal Index :
Blue Dots= Seasonal Index.
**Data taken from table1 for the seasonalindex graph
Graph Showing the Seasonal Index, Actual demand & 4-Quarter moving
central:
SI= (modified mean of each quarter * adjustingconstant)
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**Data taken from Table1 for the graph.
Calculation for Deseasonalized demand:
Deseasonalized demand (TCSR/S) = (Actual Demand / Seasonal Index)
Example:
1.762=50/28.38
1.347=35/25.99
& So on.
Variation estimation of Actual demand, 4-qtr moving average &
Deseasonalized Demand:
SalesSeasonalIndex(S) TCR=TCSR/S
50 28.38 1.762
35 25.99 1.347
45 27.36 1.645
55 27.77 1.981
25 26.96 0.927
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Red Dots= 4-qtr centerl average.
Blue Dots= Actual Demand.
Green Dots= De-seasonalized Demand.
**Data taken from Table1 for the Graph.
Calculation for Actual Trend Sales:Base year is 2002 as because it is in the middle year as total number of
year is uneven. When number of year is uneven should follow thefollowing formula.
X= (Base year current year)*2
So, is substracted from base year and not any value is considerd.
Number of year= n.
If Y=na + bX. (1)
Then, a= ( Y - bX)/n
a = Y/n (X=0)
IfXY= aX+bx2 (2)
Then, xy= (XY-aX)/X2
b= XY/x2 (X=0)
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Then calculate the Actual Sales Trend from (a+b*X).
Graph showing for the Actual Trend of Demand:
**Date taken from Table1 for Actual trend of demand.
Calculation for Cyclical Component Analysis:
The cyclical component(CR) is isolated by dividing TCR by T. Cyclicalcomponent c is created by avereage of thrre CR.
Example:
CR= TCR/Trend
C= avereage three CR.
Graph showing for Cyclical Component:
Sales TCR Trend CR "C"
50 28.38 25.25 1.124
35 25.99 25.43 1.022 1.071
45 27.36 25.61 1.068 1.056
55 27.77 25.80 1.077 1.061
25 26.96 25.98 1.038
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**Data taken from table1 for Cyclical Component.
Cyclical Component scatter plot formula = three quarter moving average of
CR.
Calculation for Random Component:
Random Component R = CR/C
Example:
0.95= 1.022/1.071
1.01= 1.068/1.056
& So on
Sales TCR Trend CR "C" "R"
50 28.38 25.25 1.124
35 25.99 25.43 1.022 1.0710.9
5
45 27.36 25.61 1.068 1.0561.0
1
55 27.77 25.80 1.077 1.0611.0
1
25 26.96 25.98 1.038
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Graph showing for Random Componnet:
**Data taken from Table1 for random component.
Calculation for ForecastedTrend Demand for the year(2005 to 2010):
Forecastd trend demand ; Y=(a+b*X).
YearQuarter
TimeCode "x"
Sales(y=a+b*x)
2005 Q1 37 30.38
Q2 39 30.56 Q3 41 30.74
Q4 43 30.93
2006 Q1 45 31.11
Q2 47 31.29
Q3 49 31.48
Q4 51 31.66
2007 Q1 53 31.84
Q2 55 32.03
Q3 57 32.21
Q4
59 32.39
2008 Q1 61 32.58
Q2 63 32.76
Q3 65 32.94
Q4 67 33.13
2009 Q1 69 33.31
Q2 71 33.49
Q3 73 33.68
Q4 75 33.86
2010 Q1 77 34.04
Q2 79 34.23
Q3 81 34.41
Q4 83 34.59
a=26.99,
b=0.0196
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Graph showing for Forecasted Trend Demand:
Table1:
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