Forecasting system using single exponential smoothing with golden section optimization

Abstract

Puri Wira Mahkota Ltd is a distributor company in the automotive parts industry. Puri Wira Mahkota has an obstacles in preparing weekly order on stock to the primary production unit. They predict total sales of product in the coming period just by using an expectation from stock administration staff then it will be compared with sales data in the previous period without any calculations using a definitive formula. Forecasting calculation could support Puri Wira Mahkota to predict the quantity of product. The purpose of this research is to apply the calculation process that can predict the quantity of product should be produced by the primary production unit every month and also to prevent over stock and out of stock. The method used in the forecasting calculation is Single Exponential Smoothing. To optimize Single Exponential Smoothing we used the Golden Section. The principle of the Golden Section is to reduce the alpha area boundary so it will produce an ideal forecast value with the minimum MAPE (Mean Absolute Percentage Error) level. This research shows the results that the Golden Section finds the optimal forecasting value with a level of MAPE (Mean Absolute Percentage Error) of 43.39%.