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Abstract

To estimate future sales and to ensure customer deliverability, the dairy industry needs reliable forecasts for milk delivery from the farmers. In light of the shortage of milk in Norway in fall 2011, the dairy industry recognized that it needed better tools for forecasting milk delivery. Therefore I developed models which can help the industry avoiding similar situations in the future. I analysed the monthly milk deliveries to Norwegian dairy companies from January 2001 to December 2010 and fitted two time series models. I tested a multiplicative Holt Winters’ exponential smoothing model (HW) and a multiplicative seasonal autoregressive integrated moving average model (SARIMA) for forecasting monthly milk delivery. The two time series models were compared with a model based on expert opinions, and a model based on historic monthly quantities. The test showed that a combination of the Expert model and the two time series models give reliable forecasts for a period of up to two years.

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