Preliminary Objective of forecasting is to filter out the random component and estimate the systematic component. Three ways to calculate the systematic component shown as follows: Multiplicative S=level x trend x seasonal factor -Additive S level trend seasonal factor -Mixed S=(level trend)x seasonal factor The specific form of the systematic component depends on the nature of demand. SEIEE AU406 Supply Chain Management 11Preliminary • Objective of forecasting is to filter out the random component and estimate the systematic component. • Three ways to calculate the systematic component shown as follows: – Multiplicative S = level x trend x seasonal factor – Additive S = level + trend + seasonal factor – Mixed S = (level + trend) x seasonal factor The specific form of the systematic component depends on the nature of demand. SEIEE AU406 Supply Chain Management 11