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Former Member
Jun 17, 2010 at 08:55 AM

Basic value computation in Forecasting

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Hi Gurus.

Can anyone help me on how basic value is computed?

Please see below sample:

Forecast model T

Period Indicator M

Historical periods 6

Forecast periods 1

Periods per season 12

Initialization X

Model selection A

Optimization level F

Alpha factor 0.10

Delta factor 0.30

Selection procedure 2

Basic value 5.975

MAD 2

Safety Stock 6

Error total -8

Reorder Point 18

Consumtion values

6.201

5.201

4.201

3.201

2.201

1.201

12.2009

11.2009

10.2009

9.2009

8.2009

After forecasting run below values were derived:

Basic value 3.739 -->>> how was this derived? what is the formula?

MAD 2

Safety Stock 6

Error total 1

Reorder Point 8

Thanks in advance.