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Technological Institute of the Philippines

Calculation of Statistical Projections


Selection of the right method of projection should be taken cautiously. The following methods
are commonly used in feasibility studies:
1.
Arithmetic Straight Line Method
2.
Arithmetic Geometric Curve Method
3.
Statistical Straight Line Method
4.
Statistical Parabolic Method
Every method yields different figures and trends using the same historical data. Determination
of the most appropriate method for the data is a must. Identifying the right method for
projections can either be done graphically or mathematically. The first technique is through
plotting the values given in the data gathered along the coordinates. Approximate trend can be
established from the shape of the line.
COMPUTATION FOR STANDARD DEVIATION (SD):

Absolute=|Y Yc|

Squared=( Y Yc )
SD =

(Deviation Squared )
N

Where:

Y =H i s t o r i c al D a t a ( in k g )
Y c=P r o j e c t e d D a t a (in k g)
Arithmetic Straight Line Method (ASLM)
The arithmetic straight line method assumes that the annual increase in the future will
remain constant.
Equation used:

A=Y finalY initial


X=

A
n1

Yc=Y n1+ X
Arithmetic Geometric Curve Method (AGCM)
Arithmetic Geometric Curve Method uses the assumption that the rate of increase in the
projected values is constant even though the amount of change keeps on increasing.
Equation used:

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Annual Increase =Y nY n1
%Increase=

Annual Increase
x 100
Y n1

X =Average Increase=

( Increase)
x 100
n1

Yc=Y n1+ 1+

X
100

Arithmetic Geometric Curve Method (AGCM)


Arithmetic Geometric Curve Method uses the assumption that the rate of increase in the
projected values is constant even though the amount of change keeps on increasing.
Equation used:

Annual Increase =Y nY n1

%Increase=

Annual Increase
x 100
Y n1

X =Average Increase=

( Increase)
x 100
n1

Yc=Y n1+ 1+

X
100

Statistical Straight Line Method (SSLM)


SSLM uses the assumption that the change in the figure is constant while the change for
the data of the year is decreasing.
Equation used:

a=

Y
n

b=

XY
X2

Yc=a+bX
Statistical Parabolic Projection Method (SPSM)
SPSM uses the assumption that the change in the predicted values and the percentage change
may be decreasing or increasing.
Equation used:

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n ( X 4 )

( X 4 ) ( XY ) ( X 2) ( X 2 Y )
a=

b=

( XY )
X2

(
n X 4 )

n ( X 2 Y ) ( X 2 ) ( X 2 Y )
c=

Yc=a+bX + c X 2

Historical Supply of Propylene Glycol


Since there was no local producer of Propylene Glycol here, the data presented below is
the imported Propylene Glycol only from neighboring countries, such as Brazil, China, Taiwan,
Germany, Hongkong, India, Italy, Japan, Korea, Malaysia, Singapore, Sweden, Switzerland, and
United States of America.
Table .Historical Supply of Propylene Glycol
[National Statistics Office (NSO) Public Reference Unit, 2015]

Technological Institute of the Philippines

Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Net Weight (kg)


4,245,112
3,802,093
3,475,682
3,342,084
3,439,728
3,828,102
4,418,323
5,320,911
4,991,860
6,415,424

Projected Supply of Propylene Glycol


Based on its historical data, statistical projection of the supply of Propylene Glycol is made
by four different methods.
Arithmetic Straight Line Method (ASLM)
Arithmetic Straight Line Method (ASLM) assumes that the annual increase in the future
will be the same although the rate or increase in percent will keep on going down.
Table. ASLM Analysis of Propylene Glycol Supply
Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Yc

Deviation
Absolute
Squared

4,245,112 2,170,312 241,146


3,802,093 2,170,312 241,146 4,486,258
-684,165
Figure.
Historical
Supply
of
Propylene
Glycol
3,475,682 2,170,312 241,146 4,727,403
-1,251,721
3,342,084 2,170,312 241,146 4,968,549
-1,626,465
3,439,728 2,170,312 241,146 5,209,695
-1,769,967
3,828,102 2,170,312 241,146 5,450,841
-1,622,739
4,418,323 2,170,312 241,146 5,691,986
-1,273,663
5,320,911 2,170,312 241,146 5,933,132
-612,221
4,991,860 2,170,312 241,146 6,174,278
-1,182,418
6,415,424 2,170,312 241,146 6,415,424
0

STANDARD DEVIATION: 1,240,138

4.68x1011
1.57x1012
2.65x1012
3.13x1012
2.63x1012
1.62x1012
3.75x1011
1.40x1012
0
1.38 x1013

Arithmetic Geometric Curve Method (AGCM)


In this method, the rate of increase in the projected values is constant; however, the
amount of change keeps on increasing.

Technological Institute of the Philippines

Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Net
weight (kg)
4,245,112
3,802,093
3,475,682
3,342,084
3,439,728
3,828,102
4,418,323
5,320,911
4,991,860
6,415,424

Table. AGCM analysis of Propylene Glycol


Deviation
Annual
%
X
Yc
Increase Inc.
Absolute
Squared
5.50
3961314
283,798
8.05x1010
-443,019 -10 5.50
4179308
-377,215
1.42x1011
-326,411
-9
5.50
4409299
-933,617
8.72x1011
-133,598
-4
5.50
4651946
-1,309,862
1.72x1012
97,644
3
5.50
4907946
-1,468,218
2.16x1012
388,374
11 5.50
5178034
-1,349,932
1.82x1012
590,221
15 5.50
5462985
-1,044,662
1.09x1012
902,588
20 5.50
5763617
-442,706
1.96x1011
-329,051
-6
5.50
6080793
-1,088,933
1.19x1012
1,423,564 29 5.50

9.26x1012
STANDARD DEVIATION: 1,029,030,116,998

Statistical Straight Line Method (SSLM)


For this method, the change in figure is uniform, while the percentage change of data for
the year is decreasing.
Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Table. SSLM Analysis of Propylene Glycol Supply


Y
X
XY
4,245,112
1
4,245,112
3,802,093
2
7,604,186
3,475,682
3
10,427,046
3,342,084
4
13,368,336
3,439,728
5
17,198,640
3,828,102
6
22,968,612
4,418,323
7
30,928,261
5,320,911
8
42,567,288
4,991,860
9
44,926,740
6,415,424
10
64,154,235
43,279,319
55
258,388,456

X2
1
4
9
16
25
36
49
64
81
100
385

Table. Continuation of SSLM Analysis of Propylene Glycol Supply


Deviation
a
b
Yc
Absolute
Absolute
-753,959
4,327,931.85
671,138.85
4,999,070.70
5.68x1011
-1,868,117
4,327,931.85
671,138.85
5,670,209.55
3.49x1012
-2,865,666
4,327,931.85
671,138.85
6,341,348.40
8.21x1012
-3,670,403
4,327,931.85
671,138.85
7,012,487.25
1.35x1013

Technological Institute of the Philippines

4,327,931.85
4,327,931.85
4,327,931.85
4,327,931.85
4,327,931.85
4,327,931.85

671,138.85
671,138.85
671,138.85
671,138.85
671,138.85
671,138.85

-4,243,898
-4,526,663
-4,607,581
-4,376,132
-5,376,321
-4,623,897

7,683,626.09
8,354,764.94
9,025,903.79
9,697,042.64
10,368,181.48
11,039,320.33

STANDARD DEVIATION: 4,148,750

1.80x1013
2.05x1013
2.12x1013
1.92x1013
2.89x1013
2.14x1013
1.55x1014

Statistical Parabolic Projection Method (SPPM)


In SPPM, the change in the predicted values may be increasing or decreasing while the
percentage change of the values for the prior year may also be increasing or decreasing.
Table. SPPM Analysis of Propylene Glycol Supply
Y
X
X2
4,245,112
-9
81
3,802,093
-7
49
3,475,682
-5
25
3,342,084
-3
9
3,439,728
-1
1
3,828,102
1
1
4,418,323
3
9
5,320,911
5
25
4,991,860
7
49
6,415,424
9
81
43,279,319
0
330

Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

X4
6,561
2,401
625
81
1
1
81
625
2,401
6,561
19,338

Table. Continuation of SPPM Analysis of Propylene Glycol Supply


XY

X2Y

(38,206,008)
(26,614,651)
(17,378,410)
(10,026,252)
(3,439,728)
3,828,102

343,854,072
186,302,557
86,892,050
30,078,756
3,439,728
3,828,102

3,690,370
3,690,370
3,690,370
3,690,370
3,690,370
3,690,370

123,347
123,347
123,347
123,347
123,347
123,347

19,320
19,688
19,688
19,688
19,688
19,688

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13,254,969
26,604,555
34,943,020
57,738,812
40,704,409

Bx
-1,110,120
-863,427
-616,733
-370,040
-123,347
123,347
370,040
616,733
863,427
1,110,120

39,764,907
133,022,775
244,601,140
519,649,307
1,591,433,394

3,690,370
3,690,370
3,690,370
3,690,370

123,347
123,347
123,347
123,347

19,688
19,688
19,688
19,688

Table. Continuation of SPPM Analysis of Propylene Glycol Supply


Deviation
CX2
Yc
Absolute
Squared
1,564,925 4,145,175
99,937
9,987,488,352.35
946,683
3,773,626
28,467
810,370,779.11
483,002
3,556,638
-80,956
6,553,856,478.95
173,881
3,494,210
-152,126
23,142,408,330.44
19,320
3,586,343
-146,615
21,496,012,037.18
19,320
3,833,037
-4,935
24,349,986.47
173,881
4,234,290
184,033
33,867,978,790.29
483,002
4,790,105
530,806
281,755,192,941.04
946,683
5,500,480
-508,620
258,693,996,268.85
1,564,925 6,365,415
50,008
2,500,847,962.80

638,832,501,927.48
STANDARD DEVIATION: 70,981,389,103

Table. Projected Supply of Propylene Glycol Using Four Methods

Technological Institute of the Philippines

2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

ASLM
6,656,569
6,897,715
7,138,861
7,380,006
7,621,152
7,862,298
8,103,444
8,344,589
8,585,735
8,826,881

AGCM
6,768,469
7,140,943
7,533,914
7,948,511
8,385,924
8,847,407
9,334,287
9,847,960
10,389,900
10,961,664

SSLM
55,660,917
68,713,653
83,108,668
98,845,960
115,925,530
134,347,378
154,111,503
175,217,906
197,666,587
221,457,545

SPPM
7,384,911
8,558,967
9,887,584
11,370,761
13,008,499
14,800,798
16,747,656
18,849,076
21,105,056
23,515,596

ASLM
9,000,000
8,500,000

f(x)
exp( 0.03 x+
) 6415423.4
f(x) =
= 6491248.7
- 0x^2 + 241145.75x
R
R =
=1
1

8,000,000

Net Weight, kg 7,500,000


7,000,000
6,500,000

Year

Figure. Graphical Representations of Polynomial Regression for the Projected Supply of


Propylene Glycol using ASLM

Technological Institute of the Philippines

AGCM
12,000,000
11,000,000
f(x) = 12420.05x^2 + 328049.17x + 6433455.73
10,000,000
R = 1

Net Weight, kg

9,000,000
8,000,000
7,000,000
6,000,000

Year

Figure. Graphical Representations of Polynomial Regression for the Projected Supply of


Propylene Glycol using AGCM

SSLM
250,000,000
230,000,000
210,000,000
190,000,000

f(x) = 671138.85x^2 + 11039320.24x + 43950457.55


R = 1

170,000,000
150,000,000
130,000,000
110,000,000
90,000,000
70,000,000
50,000,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Figure. Graphical Representations of Polynomial Regression for the Projected Supply of


Propylene Glycol using SSLM

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SPPM
25,000,000
23,000,000
21,000,000

f(x) = 77280.26x^2 + 942215.5x + 6365415.08


R = 1

19,000,000
17,000,000
15,000,000
13,000,000
11,000,000
9,000,000
7,000,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Figure. Graphical Representations of Polynomial Regression for the Projected Supply of


Propylene Glycol using SPPM

Table. The R2 Value of Each Projection Method for Supply of Propylene Glycol
Projection Method

Standard Deviation

R2

Equation

ASLM
AGCM
SSLM
SPPM

1,240,138
1,029,030,116,998
4,148,750
70,981,389,103

1
1
1
1

y = -9E-10x2 + 241146x + 6E+06


y = 12420x2 + 328049x + 6E+06
y = 671139x2 + 1E+07x + 4E+07
y = 77280x2 + 942216x + 6E+06

Base on the R 2 obtained from each of the method, the table shows that the ASLM is to
be used to project the supply of Propylene Glycol since it gave the lowest standard deviation and
all value of R2 is equal from the gathered historical data.

Table 2.15 Projected Supply of Propylene Glycol for the Next Ten Years Using
Statistical Parabolic Projection Method
Year Supply (Netweight kg)
2015
2016
2017
2018

Technological Institute of the Philippines

2019
2020
2021
2022
2023
2024

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