Computation Section

forecast menu
A time series is a sequence of observations of a time varying quantity of interest. Examples are the monthly demand for a product, the annual freshman enrollment in a department of the university and the daily flows in a river. Time series are important for operations research because they are often the drivers of operations research decision models. An inventory model requires estimates of future demands, a course scheduling and staffing model for the university department requires estimates of future student inflow, and a model for providing warnings to the population in a river basin requires estimates of river flows for the immediate future.

The forecasting add-in provides tools for selecting a model that describes the time series, selecting a method for estimating the parameters of the model and using the method to forecast future values of the time series. Models assume that observations vary according to some probability distribution about an underlying function of time.

Four forecasting methods are provided by the add-in: moving average, exponential smoothing, regression and exponential smoothing with a trend (double exponential smoothing). The add-in builds a form that accepts data from the user and provides functions that compute estimates of the model parameters. The menu installed by the forecasting add-in gives access to several options.

  • Add Forecast: This allows the user to forecast one or more time series using one of the four methods.
  • Compare: This option analyzes a single time series with more than one method.
  • Simulate: This option simulates a time series using Monte Carlo simulation so that the response of one or more forecasting methods can be compared. The data changes in real time as the simulation parameters are changed.
  • Portfolio: This option may have a number of time series representing the unit values of investments and the associated number of units owned. The add-in computes the total value of the portfolio and forecasts of the portfolio value.
  • Change: This option provides the means to change an existing forecast.
  • Relink: When a model is prepared on one computer and opened on another, the add-in functions will not work. The relink command rewrites the functions to link with the current computer. This option must be chosen to manipulate the demonstation workbook.
  • About Add-in: This option displays the author and date of the installed version of the add-in. New versions are placed on this web site in the Excel add-in section as new features are added and errors are corrected.

Click a link at the left to see pages describing the several options.


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Operations Management / Industrial Engineering
by Paul A. Jensen
Copyright 2004 - All rights reserved

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