Deseasonalized demand

Step 2 Seasonally adjust the actual demands in the time series by dividing by the seasonality index, to get deseasonalized demand data. 

Step 4 Apply the forecasting method on the deseasonalized demand forecast. 

Step 4 Apply the exponential smoothing method on the deseasonalized demand to get deseasonalized forecast as shown in Table 2.3. For example, deseasonalized forecast for Quarter 1 (2011) is given by... 

Year Quarter Period (t) Demand (D,) Seasonality Index (SI) Deseasonalized Demand [d,] Deseasonalized Forecast [f,] Forecas (F.)... 

Step 2 Using the seasonality indices, compute the deseasonalized demands. 

Step 3 Apply one of the methods discussed in Section 2.6 to incorporate trend, on the deseasonalized demand data. 

First we compute the seasonality indices and the deseasonalized demands using the approach given in Section 2.5. 

Step 2 Compute the deseasonalized demands by dividing the actual quarterly demands by their respective Si values as shown in Table 2.7. 

Year Period Actual Demand SI Deseasonalized Demand Estimate of Level (L) Estimate of Trend (T) Deseasonalized Forecast Actual Forecast... 

The systematic component measures the expected value of demand and consists of what we will call level, the current deseasonalized demand trend, the rate of growth or decline in demand for the next period and seasonality, the predictable seasonal fluctuations in demand. 

L = estimate of level at t = 0 (the deseasonalized demand estimate during Period t = 0) T= estimate of trend (increase or decrease in demand per period)... 

Deseasonalize demand and run linear regression to estimate level and trend. 

ESTIMATING LEVEL AND TREND The objective of this Step is to estimate the level at Period 0 and the trend. We start by deseasonalizing the demand data. Deseasonalized demand represents the demand that would have been observed in the absence of seasonal fluctuations. The periodicity (p) is the number of periods after which the seasonal cycle repeats. For Tahoe Salt s demand, the pattern repeats every year. Given that we are measuring demand on a quarterly basis, the periodicity for the demand in Table 7-1 is j = 4. 

With this procedure, we can obtain deseasonalized demand between Periods 3 and 10 as shown in Figures 7-2 and 7-3 (all details are available in the accompanying spreadsheet Chapter 7-Tahoe-salt). 

The following linear relationship exists between the deseasonalized demand, D, and time t, based on the change in demand over time ... 

FIGURE 7-2 Excel Workbook with Deseasonalized Demand for Tahoe Salt... 

ESTIMATING SEASONAL FACTORS We can now obtain deseasonalized demand for each period using Equation 7.4 (see Figure 7-4). The seasonal factor St for Period t is the ratio of actual demand D, to deseasonalized demand D, and is given as... 

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