HP 3000 Manuals

HP RXForecast Users Manual for MPE Systems

Adding an Interval Type 

Next, you will build on the forecasts that you have already made by
adding interval bounds.

An interval is simply a statistical range in which the forecast falls.
This range is shown on your forecast as lines defining upper and lower
limits.  In HP RXForecast, two types of intervals exist:  prediction and
confidence.  You will learn more about them later.  For now, you will
draw a graph with a confidence interval, followed by a graph with a
prediction interval.

First, add a confidence interval to your forecast. 

   1.  Select the RXForecast Options command under the Configure menu.

   2.  Select Confidence Interval for the Interval Type.

       The default Interval Type is None.

   3.  Click on  OK to enable this option for this session of HP
       RXForecast.

In reality, you probably will not be changing the Interval Type very
often.

Next, use the Forecasts command to redraw the graph.  You are not
changing any options on the Forecasts command dialog box.  Simply click
on  OK. The only difference between the following graph and the graph
shown in "Producing a Forecast" in this chapter is the addition of
interval bounds.


            

Leave this graph open so you can compare it to the next one, in which the
Interval Type is changed to Prediction.  Change the Interval Type to
Prediction and redraw the graph. 


            

Size both graphs to half-windows so you can compare them.

The confidence interval is much narrower than the prediction interval.
The confidence interval defines a range in which the average of the 
predicted values (the trend line) will fall the given percentage of the
time; while the prediction interval defines a range in which the
predicted values (all points) will fall the given percentage of the time.
The range must be wider for the prediction interval because there is more
variability in the forecasted values than there is in the mean of the
forecasted values. 


Tip  A narrow interval (small spread between the upper and lower bounds)
     tends to indicate a valid or credible forecast.  Conversely, a broad
     interval may indicate a less-credible forecast.


See "Interval Type Option"  for a detailed discussion of interval
types.

Close both graphs.

MPE/iX 5.0 Documentation