Double Exponential Smoothing for Forecast Turn-earn Index

Use Double Exponential Smoothing to forecast the turn and earn index 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

The turn and earn index (T/E Index) balances inventory turnover and profits. To calculate the turn and earn index, multiply inventory turnover and gross profit percentage. For example, if the inventory turns over 10 times in a year and has a 40% profit margin, the turn/earn index is 400.

In this worksheet, T/E Index is the Y-variable in time order.

C1
`T/E Index`
223
256
388
319

How-to

Choose Solutions Modules > Functions > Supply Chain KPIs, then click Launch.
Under Profitability, select Turn-earn index.
Select Forecast turn-earn index, then click OK.
Select Double Exponential Smoothing, then click OK.
In Variable, enter the column that contains the turn and earn index 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.