# Forecasing with Indices Essay

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Forecasting With Indices
Zaida L. Torres Vázquez, Reynaldo Sánchez Piñeiro, Jessica Lozada Rosario
University of Phoenix
QRB/501
September 9, 2012
Prof. Víctor Mojica

Forecasting With Indices
The information provided by the Winter Inventory covers a time frame of twelve months over a period of four years. With this information we calculate the Simple Index between each year starting with the first and second year, second and third year, third and fourth year, and first and fourth year. Also we calculate the index between the second, third and fourth year with the first year. From the information provided for the last four years, we can say that this company made their inventory data monthly and their high season goes from the months of October through February. Also we can see how quantities increased or decreased monthly comparing one year from another and the monthly average for all 48 months is 42,349. In the comparisons of the different month we can see how the index increase and decrease during the four year in each month, but at the end of the year, when we compare the total amount we can see that the index increase each year. With this information we can statistically measure the changes in the different months in the overall market. In the table 1-1 we present the index of the inventory of each year; we calculate the index of the inventory between the first and second year, first and third year, first and fourth year, and the first year with the first year. In conclusion the information provide in the Winter Inventory can help us to forecast an inventory for the next year and prepare a work plan for each month, preventing any lost. We can see how a simple formula can let us know how our business increase or decrease in each month during the year and also our high and low season. We can prepare our economy and our personnel through the different month and adjust the purchase of the different product with low demand. Is an excellent tool to establish a good plan to keep increasing our business for the next years.

Table 1-1
|SIMPLE AGGREGATE INDEX OF WINTER HISTORICAL INVENTORY DATA |
|Month |
|Month |Year 1 |Year 2 |Year 3 |Year 4 |Forecasting Year 5 |
|1 |55200 |39800 |32180 |62300 |50608 |
|2 |57350 |64100 |38600 |66500 |50079 |
|3 |15400 |47600 |25020 |31400 |50382 |
|4 |27700 |43050 |51300 |36500 |50684 |
|5 |21400 |39300 |31790 |16800 |50987 |
|6 |17100 |10300 |31100 |18900 |51289 |
|7 |18000 |45100 |59800 |35500 |51592 |
|8 |19800 |46530 |30740 |51250 |51894 |
|9 |15700 |22100 |47800 |34400 |52197 |
|10 |53600 |41350 |73890 |68000 |52499 |
|11 |83200 |46000 |60200 |68100 |52802 |
|12 |72900 |41800 |55200 |61100 |53104 |
|Total |457350 |487030 |537620 |550750 |618117…