Double Exponential Smoothing for Forecast Inventory Carrying Costs

Use Double Exponential Smoothing to forecast inventory carrying costs when a trend exists with no seasonal component.

This example applies to the Supply Chain Module. For more information, go to www.minitab.com/supply-chain-module.

Example

Inventory carrying cost is all the expenses related to the storage of unsold goods. You can record inventory carrying costs as a dollar amount or as a percentage of total inventory over a time period.

In this worksheet, Carrying Costs is the Y-variable in time order.

C1
`Carrying Costs`
38
22
36
35

How-to

Choose Solutions Modules > Functions > Supply Chain KPIs, then click Launch.
Under Costs, select Inventory carrying cost.
Select Forecast inventory carrying costs, then click OK.
Select Double Exponential Smoothing, then click OK.
In Variable, enter the column that contains the inventory carrying cost data.
Select Generate forecasts.
- In Number of forecasts, enter the number of consecutive time periods that you want forecasts for.
- In Starting from origin, specify the row number for the first forecast. If you leave this field blank, Minitab starts the forecasts at the end of the time series.
Click OK.

Tip

For more information about this analysis, click Help in the main dialog box.