Order the flour now or later?
A made-up bakery must order flour a week before it needs it. Order too much and it goes stale. Too little and the shelves are empty.
The baker has eight weeks of sales. What will week nine bring? She cannot know. She can make a good estimate, and say what it depends on.
Key words
| Word | What it means | Example |
|---|---|---|
| Forecast | An estimate of a future value, based on the past. | About 134 loaves next week |
| Historical data | Records of what happened before now. | The last eight weeks of sales |
| Trend | The long-term direction of the numbers. | Rising by about 4 a week |
| Outlier | A value far from the others. | A week of 300 in a run of 100s |
| Assumption | Something you accept as true so the forecast works. | The trend will carry on |
| Implication | What follows if the forecast or assumption is true or false. | If wrong, flour is wasted |
| Backtest | Test a method by forecasting a value you already know. | Forecast week 8 using weeks 1 to 7 |
| Regression | Finding the straight line that best fits the points. | Sales against week number |
The cells students fill in are left blank in this preview.
By the end of this lesson
Note
I can summarise a trend from numbers or a chart, make a simple forecast three ways, and state the assumptions and what follows from them.
Starter: what you already know
Have a go
Starter: what you already know
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Summarise a trend in words
Before you forecast, say what the past shows. Use four things.
- Direction. Up, down or flat?
- Size. By how much, roughly?
- Pattern. Does it repeat, such as a busy Saturday?
- Outliers. Is any value far from the rest?
Try it: read the bars
select week, sales, repeat('#', (sales - 90) // 2) as bar
from weekly
order by week;
-- These bars start at 90 sales, not 0, so they make the rise look bigger than it is.
-- Say it in one sentence: direction, size, pattern, outliers.Check: the best summary
Have a go
Check: the best summary
3 questionsHave a go: your answers are marked here and then forgotten. Sign in if you would like your score kept, and to pick up where you left off.Sign in to keep your score
Your answers are marked here and are not kept. A college account keeps every student’s marks.