100.

0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
Dec-83
Mar-84
Jun-84
Sep-84
Dec-84
Mar-85
Jun-85
Sep-85
Dec-85
Mar-86
Jun-86
Sep-86
Dec-86
Mar-87
Jun-87
Sep-87
Dec-87
Mar-88
Jun-88
Sep-88
Dec-88

Page 1
Original data

Mar-89
Quarterly sales

Jun-89
Sep-89
Dec-89
Mar-90
Jun-90
Sep-90
Dec-90
Mar-91
Jun-91
Sep-91
Dec-91
Mar-92
Jun-92
Sep-92
Dec-92
Mar-93
Jun-93
Sep-93
 Seasonal adjustment

A B C D E F G H
1 Illustration of seasonal adjustment Unnormalized Normalized
2 on Outboard Marine data Quarter Seas. Index Seas. Index
3 http://people.duke.edu/~rnau/411outbd.htm 1 102.2% 102.4%
4 2 115.9% 116.1%
5 D15: = (AVERAGE(C13:C16)+AVERAGE(C14:C17))/2 3 112.8% 112.9%
6 ...centered moving average is the average of two 12-month 4 68.5% 68.6%
averages that are offset by 1 month relative to each other
7 (necessary for even # of seasons) 399.4% 400.0%
8
9 E15: =C15/D15 ...ratio of data G13: C13/F13 ...seasonally adjus
10 to moving average divided by the seasonal index for it
11 Date Quarter Original Trend-Cycle Ratio Seasonal Seasonally
12 Data (Ctr-Mov-Avg) (Seasonality) Index Adjusted Data
13 Dec-83 4 147.6 68.6% 215.1
14 Mar-84 1 251.8 102.4% 245.9
15 Jun-84 2 273.1 229.4 119.1% 116.1% 235.3
16 Sep-84 3 249.1 224.5 111.0% 112.9% 220.5
17 Dec-84 4 139.3 219.1 63.6% 68.6% 203.0
18 Mar-85 1 221.2 218.8 101.1% 102.4% 216.0
19 Jun-85 2 260.2 220.2 118.2% 116.1% 224.2
20 Sep-85 3 259.5 223.4
F13: =VLOOKUP(B13,$F$3:$H$6,3) 116.2% 112.9% 229.7
21 Dec-85 4 140.5
...look up the 231.3 index for60.8%
appropriate seasonal 68.6% 204.8
22 Mar-86 1 245.5 in column
the quarter number 239.5
B 102.5% 102.4% 239.8
23 Jun-86 2 298.8 246.5 121.2% 116.1% 257.5
24 Sep-86 3 287.0 259.7 110.5% 112.9% 254.1
25 Dec-86 4 168.8 281.1 60.0% 68.6% 246.0
26 Mar-87 1 322.6 307.6 104.9% 102.4% 315.1
27 Jun-87 2 393.5 333.7 117.9% 116.1% 339.1
28 Sep-87 3 404.3 354.8 113.9% 112.9% 357.9
29 Dec-87 4 259.7 373.5 69.5% 68.6% 378.5
30 Mar-88 1 401.1 391.9 102.4% 102.4% 391.8
31 Jun-88 2 464.6 401.9 115.6% 116.1% 400.3
32 Sep-88 3 479.7 402.6 119.1% 112.9% 424.7
33 Dec-88 4 264.4 396.2 66.7% 68.6% 385.3
34 Mar-89 1 402.6 377.8 106.6% 102.4% 393.2
35 Jun-89 2 411.3 362.1 113.6% 116.1% 354.4
36 Sep-89 3 385.9 346.5 111.4% 112.9% 341.7
37 Dec-89 4 232.7 322.2 72.2% 68.6% 339.1
38 Mar-90 1 309.2 298.0 103.8% 102.4% 302.0
39 Jun-90 2 310.7 283.0 109.8% 116.1% 267.7
40 Sep-90 3 293.0 270.2 108.5% 112.9% 259.4
41 Dec-90 4 205.1 257.6 79.6% 68.6% 298.9
42 Mar-91 1 234.4 250.2 93.7% 102.4% 228.9
43 Jun-91 2 285.4 244.4 116.8% 116.1% 245.9
44 Sep-91 3 258.7 246.6 104.9% 112.9% 229.0
45 Dec-91 4 193.2 251.1 76.9% 68.6% 281.6
46 Mar-92 1 263.7 259.1 101.8% 102.4% 257.6
47 Jun-92 2 292.5 264.3 110.7% 116.1% 252.0
48 Sep-92 3 315.2 263.8 119.5% 112.9% 279.1
49 Dec-92 4 178.3 265.5 67.2% 68.6% 259.9
50 Mar-93 1 274.5 265.4 103.4% 102.4% 268.1
51 Jun-93 2 295.4 116.1% 254.5
52 Sep-93 3 311.8 112.9% 276.1

Page 2
 LES model

Illustration of seasonal adjustment Unnormalized Normalized

and linear exponential smoothing Quarter Seas. Index Seas. Index
on Outboard Marine data 1 102.2% 102.4%
...use Solver to optimize alpha 2 115.9% 116.1%
3 112.8% 112.9%
4 68.5% 68.6%
399.4% 400.0%
J9: =SQRT(VAR(J15:J52)+AVERAGE(J15:J52)^2) Alpha
…RMSE = SQRT(error variance + square of mean error) 0.471

Date Quarter Original Trend-Cycle Ratio Seasonal Seasonally LES

Data (Ctr-Mov-Avg) (Seasonality) Index Adjusted Data Forecast
Dec-83 4 147.6 68.6% 215.1 215.1
Mar-84 1 251.8 102.4% 245.9 215.1
Jun-84 2 273.1 229.4 119.1% 116.1% 235.3 244.2
Sep-84 3 249.1 224.5 111.0% 112.9% 220.5 242.7
Dec-84 4 139.3 219.1 63.6% 68.6% 203.0 226.7
Mar-85 1 221.2 218.8 101.1% 102.4% 216.0 204.4
J13: =G13-H13 ... erro
Jun-85 2 260.2 220.2 118.2% 116.1% 224.2 210.1
Sep-85 3 259.5 223.4 116.2% 112.9% 229.7 220.7
Dec-85 4 140.5 231.3 60.8% 68.6% 204.8 229.7
H15: =2*G14-G13-2*(1-Alpha)*J14+((1-Alpha)^
Mar-86 1 245.5 239.5 102.5% 102.4% 239.8
....LES formula 208.7= 1st actual valu
(first 2 forecasts
Jun-86 2 298.8 246.5 121.2% 116.1% 257.5 234.9
Sep-86 3 287.0 259.7 110.5% 112.9% 254.1 260.0
Dec-86 4 168.8 281.1 60.0% 68.6% 246.0 263.3
Mar-87 1 322.6 307.6 104.9% 102.4% 315.1 254.5
Jun-87 2 393.5 333.7 117.9% 116.1% 339.1 315.3
Sep-87 3 404.3 354.8 113.9% 112.9% 357.9 354.8
Dec-87 4 259.7 373.5 69.5% 68.6% 378.5 380.2
Mar-88 1 401.1 391.9 102.4% 102.4% 391.8 401.7
Jun-88 2 464.6 401.9 115.6% 116.1% 400.3 415.1
Sep-88 3 479.7 402.6 119.1% 112.9% 424.7 421.7
Dec-88 4 264.4 396.2 66.7% 68.6% 385.3 441.8
Mar-89 1 402.6 377.8 106.6% 102.4% 393.2 406.5
Jun-89 2 411.3 362.1 113.6% 116.1% 354.4 399.4
Sep-89 3 385.9 346.5 111.4% 112.9% 341.7 359.4
Dec-89 4 232.7 322.2 72.2% 68.6% 339.1 335.1
Mar-90 1 309.2 298.0 103.8% 102.4% 302.0 327.4
Jun-90 2 310.7 283.0 109.8% 116.1% 267.7 292.9
Sep-90 3 293.0 270.2 108.5% 112.9% 259.4 252.9
Dec-90 4 205.1 257.6 79.6% 68.6% 298.9 237.2
Mar-91 1 234.4 250.2 93.7% 102.4% 228.9 275.0
Jun-91 2 285.4 244.4 116.8% 116.1% 245.9 224.9
Sep-91 3 258.7 246.6 104.9% 112.9% 229.0 227.8
Dec-91 4 193.2 251.1 76.9% 68.6% 281.6 216.7
Mar-92 1 263.7 259.1 101.8% 102.4% 257.6 265.9
Jun-92 2 292.5 264.3 110.7% 116.1% 252.0 260.5
Sep-92 3 315.2 263.8 119.5% 112.9% 279.1 253.1
Dec-92 4 178.3 265.5 67.2% 68.6% 259.9 276.3
Mar-93 1 274.5 265.4 103.4% 102.4% 268.1 265.3

Page 3
 LES model

Jun-93 2 295.4 116.1% 254.5 268.8

Sep-93 3 311.8 112.9% 276.1 256.8
Dec-93 68.6% 273.2 273.2
Mar-94 102.4% 275.8 275.8
Jun-94 G53: =H53 116.1% 278.4 278.4
Bootstrapping begins here:
Sep-94 112.9% 280.9 280.9
forecasts substituted for data
Dec-94 68.6% 283.5 283.5
Mar-95 102.4% 286.1 286.1
Jun-95 116.1% 288.6 288.6
Sep-95 112.9% 291.2 291.2

Page 4
 LES model

Auto(1)= -0.05 =CORREL($J$15:$J$51,$J$16:$J$52) LES forecast (alpha=0.471, RMSE=27.4,

Auto(2)= 0.07 =CORREL($J$15:$J$50,$J$17:$J$52)
Auto(3)= 0.04 =CORREL($J$15:$J$49,$J$18:$J$52)
Auto(4)= 0.35 =CORREL($J$15:$J$48,$J$19:$J$52)
Auto(5)= -0.02 =CORREL($J$15:$J$47,$J$20:$J$52)

RMSE Error
autocorrelations Note that you can't simply
27.42136 replicate the first formula
here--the endpoint of the first
LES Reseasonalized series inside the CORREL( )
Error Forecast formula DECREASES as the
0.0 147.6 row number increases
30.8 220.3
-8.8 283.3
-22.1 K13: =H13*F13 .. seasonally adjusted
274.1
-23.7 forecast times seasonal index
155.5
11.7 209.2
J13: =G13-H13 ... error is actual minus forecast
14.1 243.8
9.0 249.3
-24.9 157.6
*(1-Alpha)*J14+((1-Alpha)^2)*J13
31.1 value)
2 forecasts = 1st actual 213.6
22.6 272.6
-5.9 293.7
-17.3 180.6
60.5 260.6
23.8 365.9
3.1 400.8
-1.7 260.9
-9.9 411.3
-14.7 481.7
3.0 476.3
-56.4 303.1
-13.3 416.2
-45.0 463.5
-17.8 406.0
4.0 230.0
-25.4 335.2
-25.1 339.9
6.5 285.7
61.7 162.8
-46.0 281.5
21.0 261.0
1.2 257.3
64.8 148.7
-8.3 272.2
-8.4 302.3
25.9 285.9
-16.4 189.6
2.8 271.6

Page 5
 LES model

-14.2 311.9
19.2 290.1
0.0 187.5
0.0 282.4
0.0 323.1
0.0 317.3
0.0 194.5
0.0 292.9
0.0 335.0
0.0 328.9

Page 6
 LES model

cast (alpha=0.471, RMSE=27.4, lag-1 autocorrelation=-0.05)

Page 7
 100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
Dec-83
Mar-84
Jun-84
Sep-84
Dec-84
Mar-85
Jun-85
Sep-85
Dec-85
Mar-86
Jun-86
Sep-86
Dec-86
Mar-87
Jun-87
Sep-87
Dec-87
Mar-88
Jun-88
Sep-88
Dec-88
Mar-89
Jun-89
Sep-89

Page 8
Dec-89
Mar-90
Adusted data

Jun-90
Sep-90
Dec-90
Mar-91
Jun-91
Sep-91
Dec-91
Mar-92
Jun-92
Sep-92
Dec-92
Mar-93
Jun-93
Sep-93
Original data
Moving average
Seasonally adjusted
 100
150
200
250
300
350
400
450
500
Dec-83
Mar-84
Jun-84
Sep-84
Dec-84
Mar-85
Jun-85
Sep-85
Dec-85
Mar-86
Jun-86
Sep-86
Dec-86
Mar-87
Jun-87
Sep-87
Dec-87
Mar-88
Jun-88
Sep-88
Dec-88
Mar-89
Jun-89
Sep-89

Page 9
Dec-89
Forecast--SA

Mar-90
Jun-90
Sep-90
Dec-90
Mar-91
Jun-91
Sep-91
Dec-91
Mar-92
Jun-92
Sep-92
Dec-92
Mar-93
LES forecast

Jun-93
LES forecast (alpha=0.471, RMSE=27.4, lag-1 autocorrelation=-0.05)

Sep-93
Seasonally adjusted

Dec-93
Mar-94
Jun-94
Sep-94
Dec-94
Mar-95
Jun-95
Sep-95
 100
150
200
250
300
350
400
450
500
Dec-83
Mar-84
Jun-84
Sep-84
Dec-84
Mar-85
Jun-85
Sep-85
Dec-85
Mar-86
Jun-86
Sep-86
Dec-86
Mar-87
Jun-87
Sep-87
Dec-87
Mar-88
Jun-88
Sep-88
Dec-88
Mar-89
Jun-89
Sep-89

Page 10
Dec-89
Forecast-NSA

Mar-90
Jun-90
Sep-90
Dec-90
Mar-91
Jun-91
Sep-91
Dec-91
Mar-92
Jun-92
Sep-92
Dec-92
Original series

Mar-93
Jun-93
Sep-93
Reseasonalized forecast

Dec-93
Mar-94
Jun-94
LES forecast (alpha=0.471, RMSE=27.4, lag-1 autocorrelation=-0.05)

Sep-94
Dec-94
Mar-95
Jun-95
Sep-95
 -80.0
-60.0
-40.0
-20.0
0.0
20.0
40.0
60.0
80.0
Jun-84
Sep-84
Dec-84
Mar-85
Jun-85
Sep-85
Dec-85
Mar-86
Jun-86
Sep-86
Dec-86
Mar-87
Jun-87
Sep-87
Dec-87
Mar-88
Jun-88
Sep-88
Dec-88
Mar-89
Errors

Page 11
Jun-89
Sep-89
Dec-89
Mar-90
Jun-90
Sep-90
Errors (seasonally adjusted)

Dec-90
Mar-91
Jun-91
Sep-91
Dec-91
Mar-92
Jun-92
Sep-92
Dec-92
Mar-93
Jun-93
Sep-93
 Error autocorrelations

Error Autocorrelations
0.40

0.20

0.00

-0.20

-0.40
1 2 3 4 5

Page 12
-60
-40
-20
0
20
40
60
80
100
150
200
250
300
350
400
450
500

100
150
200
250
300
350
400
450
500
Dec-83 Dec-83
Mar-84 Mar-84
Jun-84 Jun-84
Sep-84 Sep-84
Dec-84 Dec-84
Mar-85 Mar-85
Jun-85 Jun-85
Sep-85 Sep-85
Dec-85 Dec-85
Mar-86 Mar-86
Jun-86 Jun-86
Sep-86 Sep-86
Dec-86 Dec-86
Mar-87 Mar-87
Jun-87 Jun-87
Sep-87 Sep-87
Dec-87 Dec-87
Mar-88
Mar-88
Jun-88
Jun-88
Sep-88
Sep-88
Dec-88
Dec-88
Mar-89
Mar-89
Jun-89
Jun-89
Sep-89
Quarterly sales

Dec-89 Sep-89
Mar-90 Dec-89
Jun-90 Mar-90
Sep-90 Jun-90
Dec-90 Sep-90
Mar-91 Dec-90
Jun-91 Mar-91

Errors (seasonally adjusted)

Sep-91 Jun-91
Dec-91 Sep-91
Mar-92 Dec-91
Jun-92 Mar-92
Sep-92 Jun-92
Dec-92 Sep-92
Mar-93 Dec-92
Jun-93 Mar-93
Sep-93 Jun-93
Dec-93 Sep-93
Mar-94
LES forecast (alpha=0.471, RMSE=27.4, lag-1 autocorrelation=-0.05)
 -80
-60
-40
-20
0
20
40

Jun-84
Sep-84
Dec-84
Mar-85
Jun-85
Sep-85
Dec-85
Mar-86
Jun-86
Sep-86
Dec-86
Mar-87
Jun-87
Sep-87
Dec-87
Mar-88
Jun-88
Sep-88
Dec-88
Mar-89
Jun-89
Sep-89
Dec-89
Mar-90
Jun-90
Sep-90
Dec-90
Mar-91
Jun-91
Sep-91
Dec-91
Mar-92
Jun-92
Sep-92
Dec-92
Mar-93
Jun-93
Sep-93
 Sep-91 Jun-91
Dec-91 Sep-91
Mar-92 Dec-91
Jun-92 Mar-92
Sep-92 Jun-92
Dec-92 Sep-92
Mar-93 Dec-92
Jun-93 Mar-93
Sep-93 Jun-93
Dec-93 Sep-93
Mar-94

utocorrelation=-0.05)
Jun-94
Sep-94
Dec-94
Mar-95

-0.4
-0.2
0.0
0.2
0.4
100
150
200
250
300
350
400
450
500

Jun-95
Sep-95 Dec-83
Mar-84

1
Jun-84
Sep-84
Dec-84

100
150
200
250
300
350
400
450
500
Mar-85

2
Dec-83 Jun-85
Mar-84 Sep-85
Jun-84 Dec-85
Sep-84

3
Mar-86
Dec-84 Jun-86
Mar-85 Sep-86
Jun-85 Dec-86

4
Sep-85 Mar-87
Dec-85 Jun-87
Mar-86 Sep-87

Error Autocorrelations
Jun-86 Dec-87

5
Sep-86 Mar-88
Dec-86 Jun-88
Mar-87 Sep-88
Jun-87 Dec-88
Sep-87 Mar-89
Dec-87 Jun-89
Mar-88 Sep-89
Jun-88 Dec-89
Sep-88 Mar-90
Dec-88 Jun-90
Mar-89 Sep-90
Jun-89 Dec-90
Sep-89 Mar-91
Dec-89 Jun-91
Mar-90 Sep-91
Jun-90 Dec-91
Sep-90 Mar-92
Original data

Dec-90 Jun-92
Seasonally adju
Moving average

LES forecast (alpha=0.471, RMSE=27.4, lag-1

Jun-91
Sep-91
Dec-91
Mar-92
Jun-92
Sep-92
Dec-92
Mar-93
Jun-93
Sep-93
-0.4
-0.2
0.0

1
2
3
4
5
Mar-88 Sep-89
Jun-88 Dec-89
Sep-88 Mar-90
Dec-88 Jun-90
Mar-89 Sep-90
Jun-89 Dec-90
Sep-89 Mar-91
Dec-89 Jun-91
Mar-90 Sep-91
Jun-90 Dec-91
Sep-90 Mar-92
Original data

Dec-90 Jun-92
Moving average

Mar-91 Sep-92
Seasonally adjusted

Jun-91 Dec-92
Sep-91 Mar-93
Dec-91 Jun-93
Mar-92 Sep-93
Jun-92
Sep-92
Dec-92
Mar-93
Jun-93

forecast
Sep-93
Dec-93

Original series
Mar-94

Reseasonalized
Jun-94

1, RMSE=27.4, lag-1 autocorrelation=-0.05)

Sep-94
Dec-94
Mar-95
Jun-95
Sep-95