Guide to Using Minitab For Basic Statistical Applications

Guide to Using Minitab For Basic Statistical Applications

To AccompanyTo Accompany

Business Statistics: A Decision Making Approach, 6th Ed.

Chapter 15:Chapter 15:

Analyzing and Forecasting Time Series Analyzing and Forecasting Time Series DataData

ByBy

Groebner, Shannon, Fry, & SmithGroebner, Shannon, Fry, & SmithPrentice-Hall Publishing CompanyPrentice-Hall Publishing Company

Copyright, 2005Copyright, 2005

Chapter 15 Minitab Examples

Trend Based Forecasting

Taft Ice Cream Company Nonlinear Trend

Harrison Equipment Company Seasonal Adjustment

Big Mountain Ski Resort Single Exponential Smoothing

Humboldt Electronics Company

More Examples

Chapter 15 Minitab Examples

Double Exponential Smoothing

Billingsley Insurance Company

Trend Based Forecasting - Taft Ice Cream Company

Issue: Issue:

The owners of Taft Ice Cream Company The owners of Taft Ice Cream Company considering expanding their manufacturing considering expanding their manufacturing facilities. The bank requires a forecast of future facilities. The bank requires a forecast of future sales. sales.

Objective: Objective:

Use Minitab to build a forecasting model Use Minitab to build a forecasting model based on 10 years of data. Data file is based on 10 years of data. Data file is Taft.mtw Taft.mtw

Open File Taft.mtw

Trend Based Forecasting – Taft Ice Cream Company

First click on Graph, then Time Series Plot.

Trend Based Forecasting – Taft Ice Cream Company

In Y, enter data column. Under Time Scale choose Calendar and time unit. Click on Options.

Trend Based Forecasting – Taft Ice Cream Company

Enter 1991 as the starting year. Click OK.

Trend Based Forecasting – Taft Ice Cream Company

The linear trend is evident in this time series plot.

Trend Based Forecasting – Taft Ice Cream Company

First click on Stat, then Time Series and finally Trend Analysis.

Trend Based Forecasting – Taft Ice Cream Company

Identify the columns containing the Variable forming the time series. Also specify a Linear Model.

Trend Based Forecasting – Taft Ice Cream Company

Minitab constructs the graph, shows the Linear Trend Model and the values of MAD and MSD.

Trend Based Forecasting – Taft Ice Cream Company

Issue: Issue:

Harrison Equipment is interested in Harrison Equipment is interested in forecasting future repair costs for a crawler tractor it forecasting future repair costs for a crawler tractor it leases to contractors. leases to contractors.

Objective: Objective:

Use Minitab to develop a nonlinear Use Minitab to develop a nonlinear forecasting model. Data file is forecasting model. Data file is Harrison .mtwHarrison .mtw

Nonlinear Trend – Harrison Equipment CompanyNonlinear Trend – Harrison Equipment Company

Open File Harrison.mtw

Nonlinear Trend – Harrison Equipment Company

First click on Stat, then Time Series and finally Trend Analysis.

Nonlinear Trend – Harrison Equipment Company

Identify the time series Variable and the Model Type.

Nonlinear Trend – Harrison Equipment Company

The Minitab output shows a plot of the data and trend line, the Linear Model and the MAPE, MAD and MSD values.

Nonlinear Trend – Harrison Equipment Company

To develop a nonlinear model, click on Stat, then Time Series and finally Trend Analysis.

Nonlinear Trend – Harrison Equipment Company

This time specify a Quadratic Model.

Nonlinear Trend – Harrison Equipment Company

The Minitab output shows a plot of the data and trend line, the Quadratic Model and the MAPE, MAD and MSD values.

Nonlinear Trend – Harrison Equipment Company

Click on Calc, then Calculator.

Nonlinear Trend – Harrison Equipment Company

Identify column for new variable, in Expressions box enter form of new variable. Click OK

Nonlinear Trend – Harrison Equipment Company

Click on Stat, then Regression and Regression again.

Nonlinear Trend – Harrison Equipment Company

Define the Response variable (repair Costs) Predictors (Qtr2) then click Storage.

Nonlinear Trend – Harrison Equipment Company

Under Diagnostic Measures select Residuals, under Characteristics select Fits. Click OK twice.

Nonlinear Trend – Harrison Equipment Company

The Minitab output shows the regression model. It will also give a histogram plot of the residuals.

Nonlinear Trend – Harrison Equipment Company

Seasonal Adjustment -Big Mountain Ski Resort

Seasonal Adjustment -Big Mountain Ski Resort

Issue: Issue:

The resort wants to build a forecasting model The resort wants to build a forecasting model from data that has a definite seasonal component.from data that has a definite seasonal component.

Objective: Objective:

Use Minitab to develop a forecasting model Use Minitab to develop a forecasting model adjusting for seasonal data. Data file is adjusting for seasonal data. Data file is Big Big MountainMountain.mtw.mtw

Open File Big Mountain.mtw

Seasonal Adjustment – Big Mountain Ski Resort

Click on Stat, then Time Series and then select Decomposition.

Seasonal Adjustment – Big Mountain Ski Resort

Define the Variable, the Type of Model, the Periods in a season and the Model Components.

Seasonal Adjustment – Big Mountain Ski Resort

The graph shows the actual and predicted values.

Seasonal Adjustment – Big Mountain Ski Resort

This graph shows the original data and other graphs.

Seasonal Adjustment – Big Mountain Ski Resort

The Trend Line Equation, the Seasonal Indices and MAPE, MAD and MSD are also given.

Seasonal Adjustment – Big Mountain Ski Resort

Single Exponential Smoothing Humboldt ElectronicsSingle Exponential Smoothing Humboldt Electronics

Issue: Issue:

The company needs to develop a forecasting The company needs to develop a forecasting model to help make inventory decisions, and wants the model to help make inventory decisions, and wants the model to give more weight to recent values than to model to give more weight to recent values than to regression model do.regression model do.

Objective: Objective:

Use Minitab to develop a single exponential Use Minitab to develop a single exponential smoothing forecasting model. Data file is smoothing forecasting model. Data file is HumboldtHumboldt.mtw.mtw

Open File Humboldt.mtw

Single Exponential Smoothing – Humboldt Electronics

Click on Stat, then Time Series and finally Single Exponential Smoothing.

Single Exponential Smoothing – Humboldt Electronics

Identify the Time Series Variable. Either specify alpha or ask Minitab to optimize the forecasting model.

Single Exponential Smoothing – Humboldt Electronics

The graph shows the actual and forecast values. The accuracy measures are also given.

Single Exponential Smoothing – Humboldt Electronics

Identify the Time Series Variable. Either specify alpha or ask Minitab to optimize the forecasting model.

Single Exponential Smoothing – Humboldt Electronics

The graph shows the actual and forecast values. The accuracy measures and the optimum alpha are also given.

Single Exponential Smoothing – Humboldt Electronics

Issue: Issue:

The claims manager has data for 12 months and The claims manager has data for 12 months and wants to forecast claims for month 13. But the time wants to forecast claims for month 13. But the time series contains a strong upward trend series contains a strong upward trend

Objective: Objective:

Use Minitab to develop a Use Minitab to develop a double exponential double exponential smoothing model. smoothing model. Data file is Data file is BillingsleyBillingsley.mtw.mtw

Double Exponential Smoothing Billingsley Insurance

Double Exponential Smoothing Billingsley Insurance

Open file Billingsley.mtw

Double Exponential Smoothing – Billingsley Insurance

Click on Stat then Time Series and finally Double Exponential Smoothing.

Double Exponential Smoothing – Billingsley Insurance

Identify the Time Series Variable. Either specify alpha and beta or ask Minitab to optimize the forecasting model.

Double Exponential Smoothing – Billingsley Insurance

The graph shows the actual and forecast values. The accuracy measures are also given.

Double Exponential Smoothing – Billingsley Insurance

Identify the Time Series Variable. Either specify alpha and beta or ask Minitab to optimize the forecasting model.

Double Exponential Smoothing – Billingsley Insurance

The graph shows the actual and forecast values. The accuracy measures and the optimum Alpha and Beta are also given.

Double Exponential Smoothing – Billingsley Insurance