The use of forecasting within the business arena serves a variety of purposes.

Accurate forecasting can help administr

staffing, inventory, and production. Both qualitative and quantitative techniques can be used for forecasting dependen
forecast is to be used. A time series model is a quantitative forecasting tool in which historical data is utilized to predi
time series models include moving averages, weighted moving average, exponential smoothing, and trend projections
quantitative forecasting techniques, economic growth within the United States as shown by the establishment of new
upward trend which is expected to continue over the next two periods.
At first glance of the past five periods of data, economic growth appears to be trending upward based on the establish
When analyzing the establishment of new businesses, basic time series models were used first to determine forecasts
Basic models only consider random variations and do not account for any trends or seasonality that may be found in t
Hanna, & Hale, 2015). The 2-period moving average forecasted values also trend in an upward direction. However, th
lower than the actual values which is forecasting error. Consequently, the forecasted values for the next two periods a
period of actual data. To determine accuracy of the forecasting model, the bias, mean absolute deviation (MAD), and
(MAPE) were analyzed. The bias and MAD in this model are around 24,000 and the MAPE is 4.17%. The 3-period m
similar data with forecasting error also present in this model represented by a bias and MAD of around 39,000 and th
The exponential smoothing model attempts to provide a more accurate forecast. This forecasting model attempts to sm
for variations. In this model, a higher smoothing constant places more emphasis on recent data. The smoothing consta
error should be chosen for use in the model. The use of a 0.9 smoothing constant produces the lowest error in the mod
bias and MAD are around 20,000 and the MAPE is 3.21%. The use of this model still provides us with a forecast of n
actual period of data.
The last two forecast models, exponential smoothing with trend and regression/trend analysis, account for any appare
When analyzing the data within these models, the forecast error is much smaller. The exponential smoothing with tren
smoothing constant for forecasts (alpha) and smoothing constant for trends (beta). Using an alpha of 0.5 and beta of 0
with trend has a small MAD of 11,000 and MAPE of 1.74%. The regression/trend model has a MAD of around 7,700
models forecast future periods to increase in value.
A trend is a general movement in one direction over time which may not increase every period and may display incon
randomness (Render et al., 2015). Based on the significant reduction in forecast error when using the exponential smo
regression/trend models, an upward trend was identified in the data. These models would provide the most accurate fo
future and can be used to predict future economic growth. The forecasts should continue to be monitored for accuracy
trends develop over time as new data becomes available. With an upward trend identified, we can expect continued gr
periods in terms of the establishment of new businesses.

References
Render, B., Stair, R., Hanna, M., & Hale, T. (2015). Quantitative analysis for management (12 ed.). [GCU version]. R
https://viewer.gcu.edu/4E9TFP
forecasting can help administrators with budgeting,
used for forecasting dependent on the scope in which the
torical data is utilized to predict future values. Types of
oothing, and trend projections. Based on the use of several
n by the establishment of new businesses, exhibits an

upward based on the establishment of new businesses.

ed first to determine forecasts for the next two periods.
sonality that may be found in the data (Render, Stair,
upward direction. However, the forecasted values are all
ues for the next two periods are slightly lower than the last
bsolute deviation (MAD), and mean absolute percent error
APE is 4.17%. The 3-period moving average reflects
MAD of around 39,000 and the MAPE is 5.97%.
recasting model attempts to smooth out the data to account
nt data. The smoothing constant which provides the least
ces the lowest error in the model or the most accuracy. The
rovides us with a forecast of new business less than our last

alysis, account for any apparent trends within the data.

xponential smoothing with trend model uses both a
g an alpha of 0.5 and beta of 0.9, the exponential smoothing
el has a MAD of around 7,700 and MAPE of 1.25%. Both

period and may display inconsistent movement due to

hen using the exponential smoothing with trend and
d provide the most accurate forecasting information in the
e to be monitored for accuracy to determine if any new
ed, we can expect continued growth over the next two

ent (12 ed.). [GCU version]. Retrieved from

Forecasting Moving averages - 2 period moving average
Enter
Enter the
the past
past demands
demands in
in the
the data
data area
area

Num pds 2

Data Forecasts and Error Analysis

Period Demand Forecast Error Absolute Squared Abs Pct Err
Period 1 582569
Period 2 631817
Period 3 629078 607193 21885 21885 478953225 03.48%
Period 4 652780 630447.5 22332.5 22332.5 498740556.25 03.42%
Period 5 679072 640929 38143 38143 1454888449 05.62%
Total 82360.5 82360.5 2432582230.3 12.52%
Average 27453.5 27453.5 810860743.42 04.17% before forecast
Bias MAD MSE MAPE

Period 6 665926 672499 -6573 6573 43204329 00.99%

Period 7 672499 Average 18946.875 22233.375 618946639.81 03.38% after forecast period 6
Bias MAD MSE MAPE
 Forecasting
700000

680000

before forecast 660000

640000

620000
Value

after forecast period 6 600000

580000

560000

540000

520000
1 2 3 4 5
Time

Demand Forecast
Forecasting Moving averages - 3 period moving average
Enter
Enter the
the past
past demands
demands in
in the
the data
data area
area

Num pds 3

Data Forecasts and Error Analysis

Period Demand Forecast Error Absolute Squared Abs Pct Err
Period 1 582569
Period 2 631817
Period 3 629078
Period 4 652780 614488 38292 38292 1466277264 05.87%
Period 5 679072 637891.67 41180.333 41180.333 1695819853 06.06%
Total 79472.333 79472.333 3162097117 11.93%
Average 39736.167 39736.167 1581048559 05.97%
Bias MAD MSE MAPE

Period 6 653643.3333 661831.78 -8188.444 8188.4444 67050622.42 1.25%

Period 7 661831.7778 Average 23761.296 29220.259 1076382580 04.39% after forecast period 6
Bias MAD MSE MAPE
 Forecasting
700000

680000

660000

640000

Value 620000

600000

580000

560000

540000

520000
after forecast period 6 1 2 3 4 5
Time

Demand Forecast
Forecasting Exponential smoothing
Enter
Enter alpha
alpha (between
(between 00 and and 1),
1), enter
enter the
the past
past demands
demands in in the
the shaded
shaded column
column then
then enter
enter aa
starting
starting forecast.
forecast. IfIf the
the starting
starting forecast
forecast isis not
not in
in the
the first
first period
period then
then delete
delete the
the error
error analysis
analysis
for
for all
all rows
rows above
above the the starting
starting forecast.
forecast.

Alpha 0.9
Data Forecasts and Error Analysis
Period Demand Forecast Error Absolute Squared Abs Pct Err
Period 1 582569 582569 0 0 0 0.00%
Period 2 631817 582569 49248 49248 2.425E+09 7.79%
Period 3 629078 626892.2 2185.8 2185.8 4777721.6 0.35%
Period 4 652780 628859.42 23920.58 23920.58 572194148 3.66%
Period 5 679072 650387.94 28684.058 28684.058 822775183 4.22%
Total 104038.44 104038.44 3.825E+09 16.03%
Average 20807.688 20807.688 765022511 03.21% Before forecast
Bias MAD MSE MAPE
SE 35707.668
Period 6 676203 676203.59 0 0 0.00%

Period 7 676203 Average after forecast period 6

Bias MAD MSE MAPE
 Forecasting
700000

680000

660000

640000

620000
Value

600000

580000

560000

540000

520000
1 2 3 4
Time

582569 582569
Forecasting Simple Linear Regression
Enter
Enter alpha
alpha andand beta
beta (between
(between 00 and and 1),
1), enter
enter the
the past
past demands
demands in in the
the shaded
shaded column
column then
then
enter
enter aa starting
starting forecast.
forecast. IfIf the
the starting
starting forecast
forecast isis not
not in
in the
the first
first period
period then
then delete
delete the
the error
error
analysis
analysis for
for all
all rows
rows above
above the the starting
starting forecast.
forecast.

Alpha 0.5
Beta 0.9
Data Forecasts and Error Analysis
Forecast
Smoothed Including
Forecast, Smoothed Trend,
Period Demand Ft Trend, Tt FITt Error Absolute Squared Abs Pct Err
Period 1 582569 582569 582569 0 0 0 00.00%
Period 2 631817 582569 0 582569 49248 49248 2.425E+09 07.79%
Period 3 629078 607193 22161.6 629354.6 -276.6 276.6 76507.56 00.04%
Period 4 652780 629216.3 22037.13 651253.43 1526.57 1526.57 2330416 00.23%
Period 5 679072 652016.72 22724.087 674740.8 4331.1985 4331.198 18759280 0.0063781
Next period 676906.4 24673.126 701579.53
Total 54829.168 55382.37 2.447E+09 08.71%
676906.4008 Average 10965.834 11076.47 489306342 01.74%
Bias MAD MSE MAPE
SE 28557.146

Next period 689242.96 11102.907 700345.87

Total
Average
Bias MAD MSE MAPE
SE 0
 Forecasting
700000

680000

660000

640000

620000
Value

600000

580000

560000

540000

520000
1 2 3 4 5
Time
After forecast
Demand Smoothed Forecast, Ft
Regression

Forecasting Simple linear regression

IfIf this
this isis trend
trend analysis
analysis then then simply
simply enter
enter the
the past
past demands
demands in in the
the demand
demand
column.
column. IfIf this this isis causal
causal regression
regression then
then enter
enter the
the y,x
y,x pairs
pairs with
with yy first
first and
and
enter
enter aa new new value
value of of xx at
at the
the bottom
bottom inin order
order to
to forecast
forecast y.y.

Data Forecasts and Error Analysis

Period Demand (y) Period(x) Forecast Error Absolute Squared Abs Pct Err
Period 1 582569 1 592269.4 -9700.4 9700.4 94097760 01.67%
Period 2 631817 2 613666.3 18150.7 18150.7 3.29E+08 02.87%
Period 3 629078 3 635063.2 -5985.2 5985.2 35822619 00.95%
Period 4 652780 4 656460.1 -3680.1 3680.1 13543136 00.56%
Period 5 679072 5 677857 1215 1215 1476225 00.18%
Total 0 38731.4 4.74E+08 06.23%
Intercept 570872.5 Average 0 7746.28 94877530 01.25%
Slope 21396.9 Bias MAD MSE MAPE
SE 12574.94
Period 6 Forecast 699253.9 6
Period 7 Forecast 720650.8 7 Correlatio 0.951899
Coefficient of determination 0.906111
Tracking Signal
Cum error Cum Abs ErMad Track Signal (Cum error/MAD)

18150.7 18150.7 18150.7 1

12165.5 24135.9 11278.77 1.07862
8485.4 27816 9379.1 0.904714 Regression
9700.4 29031 7746.28 1.252266 700000

650000

600000

550000

500000
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
Column B Linear (Column B)
ion

3 3.5 4 4.5 5 5.5

Linear (Column B)