Example: Method 2: Calculated Percent Over Last Year

The Calculated Percent Over Last Year formula multiplies sales data from the previous year by a factor that is calculated by the system, and then it projects that result for the next year. This method might be useful in projecting the affect of extending the recent growth rate for a product into the next year while preserving a seasonal pattern that is present in sales history.

Forecast specifications: Range of sales history to use in calculating the rate of growth. For example, specify n equals 4 in the processing option to compare sales history for the most recent four periods to those same four periods of the previous year. Use the calculated ratio to make the projection for the next year.

Required sales history: One year for calculating the forecast plus the number of time periods that are required for evaluating the forecast performance (periods of best fit).

This table is history used in the forecast calculation, given n = 4:

Past Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
1	128	117	115	125	122	137	140	129	131	114	119	137
2	None	None	None	None	None	None	None	None	118	123	139	133

Calculation of Percent Over Last Year, given n = 4.

Past year 2 equals 118 + 123 + 139 + 133 = 513.

Past year 1 equals 131 + 114 + 119 + 137 = 501.

ratio percent = (501/513) × 100 percent = 97.66 percent.

This table is the forecast for next year, 97.66 Percent Over Last Year:

Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
125	114	112	122	119	134	137	126	128	111	116	134

January forecast equals 128 × 0.9766 = 125.00 rounded to 125.

February forecast equals 117 × 0.9766 = 114.26 rounded to 114.

March forecast equals 115 × 0.9766 = 112.31 rounded to 112.