Hi,
i have to finish a project with vensim for my studies. I found that nice FORECAST(input, average time, horizon) function.
Now i am facing some problems with the variables.
INPUT: Okay, that is the variable i would like to work with, e.g. demand data
AVERAGE TIME: Could somebody explain what this is for?
HORIZON: Here i can enter the number of periods in the future i want to forecast, e.g. when i am in period 1 and i want a forecast for 5, i have to set horizon to 5.
It would be nice if somebody could explain AVERAGE TIME, and tell me if i´m right with the other variables.
Best,
Jon
FORECAST(input, average time, horizon)
Forecast
Hi
The definition of forecast is as reported in the Manual:
FORECAST(input, average time, horizon) A trend extrapolating FORECAST
Returns a forecast of the value the input will take on at Time + Horizon. Equivalent to the equations:
FORECAST=input*(1+TRD*horizon)
TRD = ZIDZ(input-AV,average time*AV)
AV=INTEG((input-AV)/average time,ininput)
The FORECAST function provides a very simple trend extrapolation forecast of the future value of a variable based on its past behavior. Like any trend extrapolator it performs very badly at turnarounds.
See also: TREND,SMOOTH
Units: FORECAST(units,time,time) à units
The input units match the output units. Units for the average time and the horizon must match those of TIME STEP.
Example
R = 10 + RAMP(1,10,60)
RD = DELAY FIXED(R,10,R)
FR = FORECAST(RD,5,10)
You can see that the average time is not the period of time where the past input is taken into consideration but how much the past inputs are smoothed.
The best way to understand the forecast function is to use it with different data and to see the results as with the
smooth and trend function to see if the method is adapted to the kind of problem you are trying to solve.
There is a full chapter on forecasting in Sterman Business
Dynamic.
Regards.
JJ
The definition of forecast is as reported in the Manual:
FORECAST(input, average time, horizon) A trend extrapolating FORECAST
Returns a forecast of the value the input will take on at Time + Horizon. Equivalent to the equations:
FORECAST=input*(1+TRD*horizon)
TRD = ZIDZ(input-AV,average time*AV)
AV=INTEG((input-AV)/average time,ininput)
The FORECAST function provides a very simple trend extrapolation forecast of the future value of a variable based on its past behavior. Like any trend extrapolator it performs very badly at turnarounds.
See also: TREND,SMOOTH
Units: FORECAST(units,time,time) à units
The input units match the output units. Units for the average time and the horizon must match those of TIME STEP.
Example
R = 10 + RAMP(1,10,60)
RD = DELAY FIXED(R,10,R)
FR = FORECAST(RD,5,10)
You can see that the average time is not the period of time where the past input is taken into consideration but how much the past inputs are smoothed.
The best way to understand the forecast function is to use it with different data and to see the results as with the
smooth and trend function to see if the method is adapted to the kind of problem you are trying to solve.
There is a full chapter on forecasting in Sterman Business
Dynamic.
Regards.
JJ
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- Senior Member
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- Joined: Wed Mar 12, 2003 2:46 pm
Just a couple of additional points.
First, be careful using functions like FORECAST - they are trend extrapolators and tend to introduce instability into a model that may not reflect the real system. The function SMOOTH is the most commonly used function for forecasting, and is usually appropriate.
Second, the implementation of FORECAST in vensim uses only a single level. It is common to use two levels input, a smooth of input and a smooth of the smooth of input. Those two smoothing times (average time above) can be different. See Sterman as JJ referenced and the Molecules.
First, be careful using functions like FORECAST - they are trend extrapolators and tend to introduce instability into a model that may not reflect the real system. The function SMOOTH is the most commonly used function for forecasting, and is usually appropriate.
Second, the implementation of FORECAST in vensim uses only a single level. It is common to use two levels input, a smooth of input and a smooth of the smooth of input. Those two smoothing times (average time above) can be different. See Sterman as JJ referenced and the Molecules.