Double Exponential Smoothing for Forecast Gross Margin Return On Investment

Use Double Exponential Smoothing to forecast gross margin return on investment 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

Gross margin return on investment (GMROI) represents the ability to turn inventory into cash above the cost of the inventory. To calculate gross margin return on investment, divide the gross profit by the inventory cost for the same time period.

In this worksheet, GMROI Ratio is the Y-variable in time order.

C1
`GMROI Ratio`
2.6
2.8
3.7
3.5

How-to

Choose Solutions Modules > Functions > Supply Chain KPIs, then click Launch.
Under Profitability, select Gross margin return on investment.
Select Forecast gross margin return on investment, then click OK.
Select Double Exponential Smoothing, then click OK.
In Variable, enter the column that contains the gross margin return on investment 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.