Describe the details of each forecasting method used by Harry and explain its accuracy (MAD value) in
Question:
Describe the details of each forecasting method used by Harry and explain its accuracy (MAD value) in comparison with the accuracy of the other methods. (Hint: In answering this question, it is helpful to review a time-series plot of the 13 weeks of data.)
a) Last Value
b) Averaging
c) Moving Average (5 days)
d) Exponential Smoothing (alpha = 0.1)
e) Exponential Smoothing (alpha = 0.5)
Mark needed help, and he approached Harry, a corporate analyst, to forecast demand for the call center more accurately.
Luckily, when Mark first established the call center, he realized the importance of keeping operational data, and he provided Harry with the number of calls received on each day of the week over the last 13 weeks. The data (refer to Cutting Edge Student File No. 1) begins in week 44 of the last year (2012) and continues to week 5 of the current year (2013).
Mark indicates that the days where no calls were received were holidays. As a start, Harry used the data from the past 13 weeks and applied five different time-series forecasting methods in preparing a trial forecast of the call volume for each day of the upcoming week (Week 6).
He provided a different forecast for each day of the week by treating the forecast for a single day as being the actual call volume on that day.
From plotting the data, Harry could see that demand follows ?seasonal? patterns within the week. For example, more employees call at the beginning of the week when they are fresh and productive than at the end of the week when they are planning for the weekend. Therefore, Mark prepared and used seasonally adjusted call volumes for the past 13 weeks. After Week 6 ended, Harry compared the five forecasts with the actual volumes and calculated the Mean Absolute Deviation (MAD) values for each method. The result of Harry?s work is summarized below:
Principles of Supply Chain Management A Balanced Approach
ISBN: 978-1337406499
5th edition
Authors: Joel D. Wisner, Keah-Choon Tan, G. Keong Leong