Toledo Residential Gas Usage

Author
Crystal Ball

Summary
In this example, you work as a forecaster for the Residential Division of Toledo Gas Company. The Public Utilities Commission requires you to predict the gas usage for the coming year to make sure that the company can meet the demand. You have four data series, and usage is dependent on the three independent series. You will apply CB Predictor and multiple linear regression to create a usage forecast for the next year. Note: This example is presented as the second tutorial in the "Getting Started with CB Predictor" chapter in the CB Predictor User Manual. The tutorial provides far more detail than this description. Keywords: usage forecasting, multiple linear regression, dependent gas, residential, utility, error, CB Predictor, Developer Kit

Discussion
Through research, you know that your residential gas usage is primarily affected by three variables: new home starts, the temperature, and the price of natural gas. However, you arent sure how much effect each has on gas usage. Because you have independent variables affecting a dependent variable (the variable that you are interested in), this forecast requires regression. For regression, CB Predictor uses a technique called HyperCasting, which in one easy step: 1. Creates an equation that defines the mathematical relationship between the independent variables and your dependent variable. 2. Forecasts each independent variable using time-series forecasting methods. 3. Uses the equation it created in the first step, combining the forecasted independent variable values, to create the forecast for the dependent variable. In this model, the dependent variable is the historical residential gas usage. The independent variables are: Number of occupation permits issued (new housing starts) Average temperature per month Unit cost of natural gas The three empty worksheets, stats, output, and data, are for use with the Forecasting macro for the CB Predictor Kit exercise below.

Using CB Predictor
To run CB Predictor, select any cell within the data series in the Model sheet and open CB Predictor from the Run menu.

Using CB Predictor, cont.

CB Predictor presents you with a simple, ten-step forecasting process. You can use the Next and Back buttons to move through the steps, or you can select any of the tabs at the top of the dialog. The first three steps on the Input Data tab help you to define, organize, and view the data. When you view the data, you can view any data series by selecting it from the Series list on the top of the dialog. You can test for seasonality (shown as lags) by selecting the Autocorrelations view option from the pick list to the upper right of the dialog. Do any or all of these series show seasonality? Are there common lags? Steps 4 and 5 on the Data Attributes tab, help you to define your data format and use regression techniques. In this example, your data is in months and shows a seasonality of twelve months. Since you have several data series, and you are trying to forecast Usage, which is dependent, select the Use Multiple Linear Regression option. The Regression Variables dialog will open, and you must divide the variables you want to forecast into the Dependent Variables and Independent Variables lists. Click on OK to continue. Make sure that Standard is selected for Method. You can learn about the other choices in the CB Predictor User Manual. Step 6 on the Method Gallery tab shows you all of the eight time series methods that CB Predictor will use to forecast the independent series. To learn more about a method, double-click on the method icon to open a description window. Experienced forecasters can also use these windows to manually enter their known method parameters. Steps 7 and 8 on the Results tab help you to define how far into the future you want to forecast (a year ahead) and the confidence interval you desire (5% and 95%). In Step 9, you determine how you want to view the results (in this example, select the Paste, Report, and Methods Table result options, and paste to cell $B$101). The Methods Table creates a table listing all the methods tried, the error values and statistics for each, and the parameters for each. In the Preferences, uncheck the Chart > Fitted option, which removes the fitted values from the charts. Under Methods Table, select Three Best from the list and unselect the Parameters option, which removes the method parameters from the report. At any time during the set-up process, you can Preview the forecast results by clicking on the

Preview button at the bottom of the dialog. The Preview Forecast dialog appears, showing a graph with the historical data, the fitted data, the forecast values, and the confidence interval. You can view the forecast for any of the four series by selecting the series from the Series list on the top of the dialog. The Method field in the upper right of the dialog lists all the methods CB Predictor tried, in order from the best-fitting method (designated by the word Best) to the worst-fitting method. CB Predictor calculates the forecasted values from the method that best fits the historical data for each series. Note that Usage has only one choice: Multiple Linear regression. Note also that for the independent variables, you can select any of the other methods and can override the Best method by clicking on the Override Best button. Click on Run to begin the forecast.

Using CB Predictor, cont.

CB Predictor creates you results in several places. The program first pastes the bolded forecast results to the end of your historical data. On a separate worksheet of your workbook, it creates a report listing all the details of the time-series forecasts of each independent variable and the multiple linear regression of the dependent variable. CB Predictor also creates the Methods Table worksheet with a method table (as PivotTables) that lists all the time-series forecasting methods tried, their parameters, the error measures and statistics for each, and the regression parameters and statistics. Examine the results on Model sheet. In the Report sheet, you can see all of the details methods, parameters, charts, and results for the forecasts. In the Methods Table, you can use the pivot table to review the details and errors of each forecast. Note that CB Predictor can also define the output values as Crystal Ball assumptions (set in Step 9 Preferences) if you have Crystal Ball installed and running.

Using CB Predictor Developer Kit

You can also use this example for the CB Predictor Developer Kit, a set of macros and functions that let you customize the use of CB Predictor. This example contains a pre-written macro named Forecasting that you can run by selecting Macro > Macros from the Tools menu, and then clicking on the Run button. To view the code of the macro, click on the Edit button in the same dialog. Once the macro has run, you can view results on the stats, output, and data worksheets. Note: If you encounter a problem running the macro, it may be that you have not selected CB Predictor as a macro reference. To select CB Predictor, open the Visual Basic Editor from the Tools menu, and in the Visual Basic Editor's Tools menu, select References. Check CBPRED7.xla in the references list and click on OK. Then close the Visual Basic Editor and re-run the macro in Excel.

Copyright Information
Copyright 2004, 2008, Oracle and/or its affiliates. All rights reserved. Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.

Matriz de Correlacion entre las tres variables independientes

83276136.xls

Toledo Residential Gas Usage

Monthly Data (10/95 - 9/03) Dependent Variable Independent Variables

Date Oct-95 Nov-95 Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 Jan-97 Feb-97 Mar-97 Apr-97 May-97 Jun-97 Jul-97 Aug-97 Sep-97 Oct-97 Nov-97 Dec-97 Jan-98 Feb-98 Mar-98 Apr-98 May-98 Jun-98 Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 Jan-99 Feb-99 Mar-99 Apr-99 May-99 Jun-99 Jul-99

Occupancy 3 Usage (ft ) Permits 306.00 406 266.00 472 222.00 599 179.00 714 104.00 892 81.00 874 48.00 896 53.00 890 53.00 661 74.00 371 156.00 280 210.00 154 251.00 361 298.00 490 246.00 540 186.00 838 112.00 846 61.00 804 53.00 869 52.00 548 52.00 627 75.00 369 155.00 241 248.00 137 285.00 252 234.00 515 189.00 691 153.00 878 103.00 950 66.00 826 51.00 915 49.00 789 59.00 657 53.00 322 119.00 299 189.00 176 280.00 334 224.00 483 185.00 548 156.00 720 88.00 867 60.00 740 53.00 909 47.00 697 51.00 655 78.00 378

Average Cost of Natural Temperature Gas per ccf (Degrees F) (Dollars) 24.46 4.82 24.86 5.21 35.68 5.82 46.54 6.78 59.27 6.41 67.45 10.18 72.41 9.12 71.26 8.83 61.04 8.69 50.34 9.60 39.23 6.14 28.37 7.22 24.73 6.97 23.56 7.05 36.46 6.08 46.71 7.67 59.57 6.19 66.79 5.31 70.96 9.46 70.86 9.58 62.91 8.30 50.10 7.15 42.19 6.93 27.67 6.69 20.59 6.49 27.52 4.98 38.60 5.26 47.35 5.84 61.00 6.74 67.47 6.44 72.90 8.79 68.65 7.53 64.33 7.39 53.48 7.13 41.25 6.09 28.05 5.44 22.18 6.82 23.68 8.34 34.90 6.08 44.14 7.44 58.51 5.97 65.63 8.02 73.30 8.04 69.89 7.88 66.44 8.24 53.07 8.76

Page 1

83276136.xls

Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Sep-00 Oct-00 Nov-00 Dec-00 Jan-01 Feb-01 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03

108.00 204.00 241.00 252.00 220.00 186.00 85.00 50.00 69.00 43.00 48.00 68.00 89.00 190.00 252.00 236.00 171.00 121.00 84.00 49.00 44.00 43.00 47.00 74.00 157.00 237.00 286.00 259.00 166.00 111.00 58.00 45.00 43.00 39.00 40.00 61.00 101.00 215.00 265.00 261.00 215.00 129.00 85.00 47.00 39.00 36.00 37.00 56.00 97.00 194.00

289 146 380 514 552 716 737 822 977 723 716 371 279 145 349 503 594 818 813 810 877 953 779 372 265 133 357 507 665 711 857 679 937 739 600 357 292 143 356 503 812 814 912 782 727 764 694 312 269 147

39.67 26.81 23.46 25.21 36.13 48.71 60.70 65.80 75.00 72.24 66.51 51.96 37.78 27.54 23.04 28.08 35.53 45.55 61.27 67.59 71.29 71.65 62.85 50.36 40.12 28.55 23.73 25.78 34.45 49.74 56.77 66.93 70.77 69.46 63.17 49.53 39.48 27.09 21.96 25.53 36.89 48.00 61.39 67.55 72.36 70.81 62.53 51.72 39.32 25.64

7.54 6.83 5.70 5.70 6.21 6.15 7.38 8.14 8.87 6.63 10.22 5.30 7.07 7.04 6.37 6.61 7.55 5.81 6.09 10.22 7.84 10.18 6.22 8.78 6.15 7.88 5.94 6.54 6.42 7.53 7.14 7.87 8.05 9.16 9.63 7.11 5.64 7.60 5.32 7.31 6.17 7.46 5.23 7.75 8.66 10.37 9.12 7.24 6.81 6.71

Page 2