Forecasting with Indices

Forecasting with Indices

Conversion of Data into Index for Each Month of Each Year

In order to calculate the index for each month of each year, the value of each month is divided by the average of that year. In this way all the indices of all the months have been calculated. The forecasted values are calculated by using the average of the four years.

Month

Year 1

Year 2

Year 3

Year 4

Forecast

1

18,000

45,100

59,800

35,500

39,600

2

19,800

46,530

30,740

51,250

37,080

3

15,700

22,100

47,800

34,400

30,000

4

53,600

41,350

73,890

68,000

59,210

5

83,200

46,000

60,200

68,100

64,375

6

72,900

41,800

55,200

61,100

57,750

7

55,200

39,800

32,180

62,300

47,370

8

57,350

64,100

38,600

66,500

56,638

9

15,400

47,600

25,020

31,400

29,855

10

27,700

43,050

51,300

36,500

39,638

11

21,400

39,300

31,790

16,800

27,323

12

17,100

10,300

31,100

18,900

19,350

Avg.

38,113

40,586

44,802

45,896

42,349

Month

1

2

3

4

5

6

7

8

9

10

11

12

Average

Year-1

0.472

0.520

0.412

1.406

2.183

1.913

1.448

1.505

0.404

0.727

0.561

0.449

1.000

Year-2

1.111

1.146

0.545

1.019

1.133

1.030

0.981

1.579

1.173

1.061

0.968

0.254

1.000

Year-3

1.335

0.686

1.067

1.649

1.344

1.232

0.718

0.862

0.558

1.145

0.710

0.694

1.000

Year-4

0.773

1.117

0.750

1.482

1.484

1.331

1.357

1.449

0.684

0.795

0.366

0.412

1.000

Overall

0.923

0.867

0.693

1.389

1.536

1.377

1.126

1.349

0.705

0.932

0.651

0.452

Calculation of Index for Year 5

The index for the forecasted year is also calculated by determining the average of all twelve months and then dividing each month's forecasted value by the average.

Month

Forecast

1

0.935088

2

0.875582

3

0.7084

4

1.398145

5

1.520108

6

1.36367

7

1.118564

8

1.3374

9

0.704976

10

0.935973

11

0.645175

12

0.456918

Slope ...