Indices

Forecasting with Indices

QRB 501

Forecasting with Indices

Indices are statistical measures of a database that represent a larger set of data. Index changes identify the moving average performance of the data. The stock market uses the Dow Jones Industrial Average to reference market strength at any given moment during trading. More important than a reference, indices offer daily, weekly, monthly and seasonal analysis. The results of this analysis produce trend lines in the graphed data. Trend lines are valuable in predicting future performance, given stable external forces that could affect the trend. The Winter Historical Inventory Data shown in the below chart is graphed to provide a visual image of the inventory trend and projection.

|Winter Historical Inventory |Year 5 projection |

| Month | Year 1 | Year 2 | Year 3 | Year 4 | |

| January | 55,200 | 39,800 | 32,180 | 62,300 | 50,790 |

| February | 57,350 | 64,100 | 38,600 | 66,500 | 57,125 |

| March | 15,400 | 47,600 | 25,020 | 31,400 | 36,210 |

| April | 27,700 | 43,050 | 51,300 | 36,500 | 48,300 |

| May | 21,400 | 39,300 | 31,790 | 16,800 | 21,995 |

| June | 17,100 | 10,300 | 31,100 | 18,900 | 25,900 |

| July | 18,000 | 45,100 | 59,800 | 35,500 | 56,400...