If we want to use a multiplicative trend in Winter's method, we should use the following equations: L, = a * ) + (1 – a) * (!) T, = B * (II) + (1 – B) * T,-1 %3D ) + (1 – – y)* $r-12 a Determine what I and II should be. b Suppose we are working with monthly data and month 12 is a December, month 13 a January, and so on. Also suppose that L12 = 100, T12 = 1.2, s = 0.90, s2 = 0.70, and s3 = 0.95. Suppose x13 = 200. At the end of month 13, what is the prediction for x15? Assume a = B = y = 0.5.
If we want to use a multiplicative trend in Winter's method, we should use the following equations: L, = a * ) + (1 – a) * (!) T, = B * (II) + (1 – B) * T,-1 %3D ) + (1 – – y)* $r-12 a Determine what I and II should be. b Suppose we are working with monthly data and month 12 is a December, month 13 a January, and so on. Also suppose that L12 = 100, T12 = 1.2, s = 0.90, s2 = 0.70, and s3 = 0.95. Suppose x13 = 200. At the end of month 13, what is the prediction for x15? Assume a = B = y = 0.5.
Operations Research : Applications and Algorithms
4th Edition
ISBN:9780534380588
Author:Wayne L. Winston
Publisher:Wayne L. Winston
Chapter24: Forecasting Models
Section24.4: Winter’s Method: Exponential Smoothing With Seasonality
Problem 15P
Related questions
Question
Winter’s method assumes a multiplicative seasonalitybut an additive trend. For example, a trend of 5 means thatthe base will increase by 5 units per period. Suppose thereis actually a multiplicative trend. Then (ignoring seasonality)if the current estimate of the base is 50 and the currentestimate of the trend is 1.2, we would predict demand toincrease by 20% per period. Ignoring seasonality, we wouldthus forecast the next period’s demand to be 50(1.2) andforecast the demand two periods in the future to be 50(1.2)2
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 36 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, computer-science and related others by exploring similar questions and additional content below.Recommended textbooks for you
Operations Research : Applications and Algorithms
Computer Science
ISBN:
9780534380588
Author:
Wayne L. Winston
Publisher:
Brooks Cole
Operations Research : Applications and Algorithms
Computer Science
ISBN:
9780534380588
Author:
Wayne L. Winston
Publisher:
Brooks Cole