How to make a forecast for a highly seasonal business?

[fish]

Hi all,

I am working on some inventory management research. One step of the
study is to forecast a 1-year sales performance. Please take a look at
this picture. http://218.1.33.178/fish/sans.jpg
You see, this 36-month picture showed a seasonal sales performance.
Now I have some questions.
Is it possible to make a scientific 12-month forecast (from
10.2004-9.2005) at the same time according to these data? Or should I
make 10.2004 forecast at first and then move to 11.2004, and finally
9.2005? What is the usually methodologies to make this kind of
forecast?
Thank you very much. Any help would be appreciated.

zh.y

 

[Charles Williams]

There are many different published methods for forecasting with seasonality
(Winters, Box-Jenkins ...).

Excel does not have any built-in functions or methods for this, but there
are commercially available addins ( I use EZ-Forecaster), or you can build
equivalent logic/math yourself using Excel formulae.

The simplest approach is to convert the time series to a stationary one by
extracting the trend, and then fit seasonal indices using ratios to moving
average.

One standard textbook is Makridakis/Wheelwright/McGee Forecasting methods
and Applications. ISBN 0-471-08610-X

Charles
______________________
Decision Models
FastExcel 2.1 now available
www.DecisionModels.com

 

[fish]

thank you, charles. do you think it's possible to make 12 months forecasts
according to these data?

 

[Michael R Middleton]

Chapter 20, "Time Series Seasonality," of my book, "Data Analysis Using
Microsoft Excel: Updated for Office XP," has step-by-step instructions for
three methods: regression using indicator variables, autoregression, and
classical time series decomposition.

- Mike

www.mikemiddleton.com

 

[Charles Williams]

Its possible but most people would say that these methods are not very
accurate beyond 3-4 months forecast.
It depends on the stability of the time series. You might get better results
with a combination of these techniques for the shorter term and
Macroeconomic regression forecasting for the medium term.

Also 3 years is not very much data to establish an accurate seasonal
pattern.

regards
Charles
______________________
Decision Models
FastExcel 2.1 now available
www.DecisionModels.com

 

[dave]

I couldn't see your picture ...

but the answer to your question is yes ! FreeFore and AUTOBOX contain
very sophisticated AUTOMATIC MODELLING heuristics that take the
guesswork out of building these models.

See freeware offering at http://www.autobox.com/freef.exe

http://www.autobox.com
dave reilly
automatic forecasting systems
215-675-0652

 

[fish]

Thanks, Dave, I presented this question several months ago and finally
resolved it with SKEP. But I'll try your software.