Errata Updates to “Principles of Business Forecasting” By Ord and Fildes

After Chapters 3 and 4 were completed, the Exponential Smoothing Macro [ESM] was developed. The ESM is more comprehensive and more flexible than the macros developed earlier and cited in the text [SES.xlsm, LES.xlsm, HW_quarterly.xlsm and HW_monthly.xlsm]. Thus, wherever one of these earlier macros is mentioned, the reader should use the ESM instead. The ESM is described in detail in the website materials; Appendices 3A and 4A may be ignored.

NOTE: The solutions on the website are not in general meant to be a complete answer to the question posed (particularly for the more complex cases). Some of the solutions have not yet been posted. If you have queries or improvements to suggest, please contact one of the authors.

OTHER CHANGES

Page 7, section 1.3.1. Definitions for Trend and Seasonal should be provided at this stage. For consistency with later discussions (pages 74 and 100 respectively) we recommend the following: Trend: A time series is said to have a trend if the mean level at any point in time is expected to change, relative to past values. Such trends may be linear, exponential or evolve in a local fashion.Seasonal: A time series is said to have a seasonal component if it displays a recurrent pattern with a fixed and known duration (e.g. by days of the week or months of the year)

In presenting the introductory material in chapters 1 and 2 we found the following amended and new slides useful

Ord/Fildes Principles of Business Forecasting 1e Errata Sheet • September 2014

Page 59: We now provide a single Excel macro, the Exponential Smoothing Macro (ESM) along with a complete guide, ESM Manual, on the book’s website. All later references to exponential smoothing macros should be taken to refer to the ESM; see, for example, the first sentence in section 3.3.2 on page 69, the footnote on page 73 and the end-of-chapter Exercises for Chapters 3 and 4.

Page 70, Table 3.4: The entries in columns SES (0.5) and SES (opt) are incorrect. Delete the first entry in each column and move the remaining entries up by one row. In the last row (period 36) add the entries 32409 and 31739 respectively. Figure 3.7 is similarly affected. The corrected table and figure are provided below.

Table 3.4: Actual and one-step-ahead forecasts for WFJ Sales for periods 27–36, starting from period 26 as origin and using SES.xlsm

Ord/Fildes Principles of Business Forecasting 1e Errata Sheet • September 2014

Period WFJ Sales

SES (0.2)

SES (0.5)

SES (opt)

27 30,986 33,884 34,346 34,580

28 33,321 33,304 32,666 31,963

29 34,003 33,308 32,993 32,952

30 35,417 33,447 33,498 33,717

31 33,822 33,841 34,458 34,955

32 32,723 33,837 34,140 34,130

33 34,925 33,614 33,432 33,105

34 33,460 33,876 34,178 34,431

35 30,999 33,793 33,819 33,723

36 31,286 33,234 32409 31739

27 28 29 30 31 32 33 34 35 3628,000

29,000

30,000

31,000

32,000

33,000

34,000

35,000

36,000

Figure 3.7: SES FORECASTS FOR WFJ SALES: THE EFFECTS OF DIFFERENT SMOOTHING CONSTANTS

WFJ Sales SES (0.2) SES (0.5) SES (opt)

Page 73, footnote 5: The cross-reference should be to Chapter 9, section 9.6.1.

Page 88: The ESM allows values of c in the range with c=0 defaulting to the log transform.

p. 93: Exercise 3.7 should read 1989, not 1990

Ord/Fildes Principles of Business Forecasting 1e Errata Sheet • September 2014

p. 93: Exercise 3.0 should read Netflix_1 not Netflix

Page 94, Minicase 3.2: The cross-reference in the first line should be to Minicase 2.2, not Table 2.11.

p. 95: Table 3.20 uses Netflix.xlsx not Netflix_2.xlsx

Page 97, Appendix 3A: Ignore this material and use the ESM Guide, available on the book website.

p. 104: The file SES_12_months is now included in Data Sets

p. 114: Table 4.5B is now included in Examples_chapter_4.xlsx

p. 122: The file Exercise_4_2.xlsx is now included in Data Sets

Page 126, Appendix 4A: Ignore this material and use the ESM Guide, available on the book website.

Pages 143-144: The cross-references to earlier exercises in Exercises 5.2 and 5.3 should be to Exercises 3.1, 3.3 and 3.2, 3.5 respectively and not to items in Chapter 4.

p. 144: Exercise 5.9 should refer back to Minicase 4.1, not 5.1

Page 144, Exercise 5.9: The cross-references should be to Minicase 2.2 (not Table 2.11) and Minicase 4.1 (not 5.1).

In chapter 8 the residuals slide should be amended as follows:

The outline solution to mini-case 8.5 has been extended.

Ord/Fildes Principles of Business Forecasting 1e Errata Sheet • September 2014

There is a minor correction to slide 9.5.2 as follows:

Ord/Fildes Principles of Business Forecasting 1e Errata Sheet • September 2014