TRUCK FORECASTING

WITH TIME SERIES

ANALYSIS: A CASE STUDY
OF THE BLUE WATER
BRIDGE
University of Wisconsin Milwaukee
Paper No. 11-5
National Center for Freight & Infrastructure Research & Education
College of Engineering
Department of Civil and Environmental Engineering
University of Wisconsin, Madison

Authors: Jing Mao and Alan J. Horowitz

Center for Urban Transportation Studies
University of Wisconsin Milwaukee

Principal Investigator: Alan J. Horowitz

Professor, Civil Engineering and Mechanics Department, University of Wisconsin Milwaukee

December 22, 2011

Truck Forecasting with Time Series Analysis: A Case Study of the Blue Water
Bridge
INTRODUCTION
This document contains images of all slides in a course module about the use of time
series techniques for truck forecasting. The techniques are illustrated with data from the Blue
Water Bridge between Michigan and Ontario. This presentation is available upon request to
Alan Horowitz, horowitz@uwm.edu.

12/22/2011

Truck Forecasting with Time Series

Analysis: A Case Study of the Blue
Water Bridge
Prepared by
Jing Mao
Alan J. Horowitz

Outline

Introduction
Data Collection
Methodology
Conclusion

12/22/2011

Blue Water Bridge

Location
The Blue Water Bridge spans the Saint Clair River, and carries
international traffic between Port Huron, Michigan and Point
Edward and Sarnia, Ontario. Located near interchange of I-94
and I-69, the bridge forms a critical gateway linking Canada
and the United States.

Blue Water Bridge

Lane characteristics
The original Blue Water Bridge, opened in 1938 and
renovated in 1999, is a three-lane westbound bridge.
The second Blue Water Bridge, which carries three lanes
of eastbound traffic, is an impressive modern bridge
opened in 1997.

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Purpose of the Study

Forecasting the eastbound and westbound

monthly truck volume of blue water bridge from
2011 to 2013
Applying the different time series models and
select the best one for forecasting

Data Source
Dependent variables
Blue water bridge eastbound/ westbound truck volume

Independent variables
o
o
o
o

Michigan population (why freight moves)

Ontario population (why freight moves)
U.S. GDP and population (why freight moves)
Approximate Michigan GDP (derived from U.S. GDP
by the proportion of Michigan population and U.S.
population)
o U.S. all grades all formulations retail gasoline fuel
price (major cost of freight)
o North American Free Trade Agreement (NAFTA)
(why freight moves)
o September 11 attacks (why freight does not move)

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Descriptive Statistic of Dependent

Variables
Westbound and eastbound truck volume data from Jan
1984 to Dec 2010 by each month
Westbound

Eastbound

30000

30000

25000

25000

20000

20000

15000

15000

10000

Westbound

5000

Eastbound

10000
5000
Oct-87

May-87

Jul-86

Dec-86

Apr-85

Feb-86

Sep-85

Nov-84

Jan-84

Westbound truck volume

from Jan 1984 to Dec 1987

Jun-84

Oct-87

May-87

Jul-86

Dec-86

Feb-86

Apr-85

Sep-85

Nov-84

Jan-84

Jun-84

Eastbound truck volume

from Jan 1984 to Dec 1987

Descriptive Statistic of Independent

Variables
Michigan and Ontario population data from Jan 1984 to
Dec 2010 by each month
Michigan
Population(million)
10.200
10.000
9.800
9.600
9.400
9.200
9.000
8.800
8.600
8.400

Ontario Population(million)
16.0000
14.0000
12.0000
10.0000
Ontario
Populati
on(mil

8.0000
Michigan

6.0000
4.0000

Jan-10

Jan-08

Jan-06

Jan-04

Jan-02

Jan-00

Jan-98

Jan-96

Jan-94

Jan-92

Jan-90

Jan-88

Jan-86

0.0000
Jan-84

Jan-09

Jul-06

Jan-04

Jul-01

Jan-99

Jul-96

Jul-91

Jan-94

Jul-86

Jan-89

Jan-84

2.0000

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Descriptive Statistic of Independent

Variables
US GDP data from Jan 1984 to Dec 2010 by each month
and yearly U.S. population data
US GDP(billion)

U.S. Population (million)

6000.000
350
300

4000.000

250
200

2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

0
1988

Sep-08

Jul-02

Aug-05

Jun-99

Apr-93

50
May-96

100

0.000
Mar-90

1000.000
Jan-84

Population

150

1986

US GDP(billion)

2000.000

1984

3000.000

Feb-87

US GDP

5000.000

Approximate Michigan GDP

Computing the ratio of Michigan population and U.S. population
Computing Michigan GDP by applying the ratio to Michigan GDP
and U.S. GDP

Michigan GDP = Ratio * U.S. GDP

Ratio = Michigan population / U.S. population

12/22/2011

Descriptive Statistic of Independent

Variables
Michigan GDP data and U.S. all grades all formulations
retail gasoline fuel price data from Jan 1984 to Dec 2010
by each month

U.S. All Grades All Formulations Retail

Gasoline fuel Price (Dollar per Gallon
based current year)

Michigan GDP(billion)
180
4.500

140

4.000

120

3.500

100

3.000

80

Michigan
GDP(billion)

60
40

Fuel price

160

2.500

U.S. All Grades

All Formulations
Retail Gasoline
fuel Price

2.000
1.500
1.000

20

Sep

Mar

Nov

Jan-

Jul-

May

Sep

Nov

Jan-

Jul-

Mar

May

Sep

Nov

Jul-06

Jan-09

Jul-01

Jan-04

Jul-96

Jan-99

Jul-91

Jan-94

Jul-86

Jan-89

Jan-84

0.000

Jan-

0.500

Other Data
NAFTA
o The North American Free Trade Agreement or NAFTA is
an agreement signed by the governments
of Canada, Mexico, and the United States, creating a
trilateral trade bloc in North America. The agreement
came into force on January 1, 1994. It superseded
the Canada United States Free Trade
Agreement between the U.S. and Canada.

September 11
o The September 11 attacks could also be a factor to
influence the truck volume within that month.

12/22/2011

Time Series Models

Central Moving Average

Growth Factor
Exponential Smoothing
Linear Regression
ARIMA
o Box-Cox Transformation

Central Moving
Average

Growth Factor

Exponential
Smoothing

Linear Regression
ARIMA

Central Moving Average

Central moving average is a moving average such that
time period is at the center of the N time periods used
to determine which values to average.

12/22/2011

Central Moving Average

Westbound and Eastbound moving average data from
Jul 1984 to Aug 2010

100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0

Eastbound Moving Average

90000
80000

Series1
Series2

Truck Volume

70000
60000
50000
40000

Series1

30000

Series2

20000

Apr-06

R square 0.971

Sep-08

Nov-03

Jan-99

Jun-01

Aug-96

Oct-91

Mar-94

Jul-84

May-89

R square 0.956

0
Dec-86

Nov-07

Jan-02

Dec-04

Feb-99

Apr-93

Mar-96

May-90

Jul-84

10000
Jun-87

Truck Volume

Westbound Moving
Average

Seasonal adjustment factor

Seasonal adjustment factor can be used to improve
accuracy of truck volume forecasts

12/22/2011

Growth Factor
Linear growth:
F(n) = Constant + AGF * (n)
F(n): forecast volume
AGF: average growth factor
n: the number of months from the first
observation

Growth Factor
Determination of constant and AGF from the linear
regression
o
o
o
o

Tools / Add-ins / Analysis Tool Park

Tools / Data Analysis / Regression
Independent variable: month
Dependent variable: westbound truck volume (partial
initial data)

Constant:13767
AGF: 119

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Growth Factor Forecasting

F(n)=13767+119*n

Partial results with growth factor forecasting

Forecasting Results with All Initial Data

Westbound Forecasting
Truck Volume

100000
80000
60000
40000

Actual data

20000

Forecasted data

R Square 0.915

Jun-10

Dec-06

Sep-08

Jun-03

Mar-05

Dec-99

Sep-01

Jun-96

Mar-98

Sep-94

Jun-89

Mar-91

Dec-92

Sep-87

Mar-84

Dec-85

R Square 0.919
Actual data
Forecasted data
Mar-84
Dec-85
Sep-87
Jun-89
Mar-91
Dec-92
Sep-94
Jun-96
Mar-98
Dec-99
Sep-01
Jun-03
Mar-05
Dec-06
Sep-08
Jun-10

Truck Volume

Eastbound Forecasting
90000
80000
70000
60000
50000
40000
30000
20000
10000
0

10

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Growth Factor Forecasting with

Central Moving Average Series
F(n)=14291+230*n

Partial central moving average truck volume

Partial central moving

average series

Forecasting Results with All Smoothed

Data
Westbound Forecasting
Truck Volume

100000
80000

R Square 0.935

60000
40000

Moving Average

20000

Forecasting
Aug-11

Oct-08

Mar-10

May-07

Jul-04

Dec-05

Feb-03

Apr-00

Sep-01

Jan-96

Jun-97

Nov-98

Aug-94

Oct-91

Mar-93

May-90

Jul-87

Dec-88

Feb-86

Sep-84

R Square 0.940
Moving Average

Jan-10

May-11

Sep-08

May-07

Jan-06

Sep-04

May-03

Jan-02

Sep-00

May-99

Jan-98

Sep-96

May-95

Jan-94

Sep-92

May-91

Jan-90

Sep-88

Jan-86

May-87

Forecasting
Sep-84

Truck Volume

Eastbound Forecasting
80000
70000
60000
50000
40000
30000
20000
10000
0

11

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Comparison
Comparing R Square of Growth factor with initial
data and moving average(smoothed) data
R Square

Initial data

Moving average
data

Westbound

0.915

0.935

Eastbound

0.919

0.940

Growth Factor
Compound growth
F(n)=Constant*AGF(n)
o

If there are two years

AGF = F2
F1

1
Y2 Y1

Where F1 is the freight flow in year Y1, F2 is the

freight flow in year Y2
o If there are more than two years, AGF can be found
from the linear regression

12

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Growth Factor
Determination of constant and AGF
from the linear regression

Tools / Add-ins / Analysis Tool Park

Tools / Data Analysis / Regression
Independent variable: month
Dependent variable: westbound truck
volume expressed as natural logarithm
(partial initial data)
o Constant = EXP (intercept)
AGF = EXP (x-variable coefficient)
o
o
o
o

Constant:13745
AGF: 1.008

Growth Factor Forecasting

F(n) = 13745*1.008n

Partial results with compound regression forecasting

13

12/22/2011

Exponential Smoothing
Model formulation:

where
St: exponentially smoothed value for time period t
St-1: exponentially smoothed value for time period t-1
xt-1 : actual time series value for time period t
: the smoothing factor, and 0 < < 1

Example
= 0.7
St = 0.7xt-1 + (1-0.7)St-1

0.7*12878+0.3*13253

14

12/22/2011

Exponential Smoothing
Smoothing factor
o The larger is, the closer the smoothed value will
track the original data value. The smaller is, the
more fluctuation is smoothed out.

The determination of smoothing factor

o Graph fitting
o Mean squared error (MSE)

Smoothing factor assumed (0.3, 0.5, 0.7)

100000
80000

Alpha=0.3

60000

Initial data

40000
20000

Exponential
smoothing(alpha=0.3)
Feb-09

May-10

Aug-06

Nov-07

Feb-04

May-05

Nov-02

Feb-99

Aug-01

May-00

Aug-96

Nov-97

Feb-94

May-95

Aug-91

Nov-92

Feb-89

May-90

Aug-86

Nov-87

Feb-84

May-85

MSE=27875534

100000

Alpha=0.5

80000
60000
40000

Initial data

20000
Oct-10

Jun-09

Oct-06

Feb-08

Jun-05

Oct-02

Feb-04

Jun-01

Oct-98

Feb-00

Jun-97

Feb-96

Oct-94

Jun-93

Oct-90

Feb-92

Jun-89

Oct-86

Feb-88

Jun-85

Feb-84

MSE=25483163

100000
80000
60000

Initial data

40000
20000
Feb-09

Nov-07

May-10

Aug-06

May-05

Feb-04

Aug-01

Nov-02

Feb-99

May-00

Aug-96

Nov-97

Feb-94

Nov-92

May-95

Aug-91

May-90

Feb-89

Aug-86

Nov-87

Feb-84

0
May-85

Alpha=0.7

Exponential
smoothing(alpha=0.7)

MSE=24306420

15

12/22/2011

Westbound Truck Volume Forecasting

Alpha

0.3

0.5

0.7

MSE

27875534

25483163

24306420

When alpha=0.7, MSE is smallest, so we select alpha=0.7 to

forecast westbound truck volume
100000
90000
80000
70000
60000
50000

Initial data

40000

Forecasting

30000
20000
10000
Oct-09

Dec-10

Jun-07

Apr-06

Aug-08

Feb-05

Oct-02

Dec-03

Jun-00

Aug-01

Apr-99

Feb-98

Oct-95

Dec-96

Jun-93

Aug-94

Apr-92

Feb-91

Oct-88

Dec-89

Jun-86

Aug-87

Apr-85

Feb-84

Linear Regression
Model
Y = f(x1,x2,,xn) = b0 + b1x1 + b2x2 + + bnxn
Dataset with initial truck volume(partial):

16

12/22/2011

Initial Analysis

Westbound truck & Michigan

population scatterplot

Westbound truck & Ontario

population scatterplot

Initial Analysis (contd)

Westbound truck & US GDP

scatterplot

Westbound truck & Fuel price

scatterplot

17

12/22/2011

Initial Analysis (contd)

Westbound truck & NAFTA

scatterplot

Westbound truck & September 11

scatterplot

Regression Model Establishment with

SPSS
Select Analysis-Regression-Linear
Put Westbound Truck as dependent variable and other
variables as independent variables
Select Stepwise as
analysis mode

Click OK

18

12/22/2011

Results Analysis

US GDP NAFTA,
Sep.11
The order of
regression equation
The name of entered variables
The name of removed variables
The basis of entering and
removing variables

Common Statistic

Adjusted R Square=0.942 indicates

model 3 should be selected as
regression model

19

12/22/2011

Analysis of Coefficients

Regression equation:
Y=652201.511+83171.959x110177.394x2+4889.856x3
x1: Michigan population(million)
x2: Ontario population(million)
x3: Fuel price(current dollar)

Independent Variables Forecasting

Forecasting the independent variables (Ontario population,
US GDP, Fuel price ) with linear regression, respectively.
US GDP
Forecasting(billion)

Ontario population
forecasting(million)

6000
5000
4000
3000
2000
1000
0
Jul-04

Dec-07

Feb-01

Apr-94

Sep-97

Nov-90

Jan-84

Forecasting

Fuel price forecasting(Dollar

per Gallon)

3
2
1

Forecasting
Sep-09

Jan-06

Nov-07

Mar-04

Jul-00

May-02

Sep-98

Jan-95

Nov-96

Mar-93

Jul-89

Sep-87

May-91

Jan-84

0
Nov-85

Jan-06

Oct-08

Jul-00

Apr-03

Oct-97

Jul-89

Jan-95

Apr-92

Jan-84

Oct-86

Forecasting

Jun-87

14
12
10
8
6
4
2
0

20

12/22/2011

Michigan Population and GDP Forecasting

Results of the 2010 headcount show the number of
Michigan residents fell by 0.6 percent since 2000

=9.88*0.94

Forecasting the Michigan GDP

Michigan Population
* US GDP
US Population

Michigan GDP =

Independent Variables Forecasting Results

Independent variables forecasting results from
Feb 2011 to Dec 2013
Partial forecasting results

21

12/22/2011

Regression Forecasting
Westbound truck forecasting results from Feb
2011 to Dec 2013 with the multilinear regression
model

Partial forecasting results

Regression Model Establishment with

EXCEL
Inputting the dataset
Click Anova Tools Regression

y = -652211.746 +83173.846*Michigan -10178.161*Ontario

+4890.563*Fuel Price

22

12/22/2011

Forecasting Results
Plot of initial value and forecasting value
100000
90000
80000
70000
60000
50000

Initial data

40000

Forecasting

30000
20000
10000
Jan-84
Feb-85
Mar-86
Apr-87
May-88
Jun-89
Jul-90
Aug-91
Sep-92
Oct-93
Nov-94
Dec-95
Jan-97
Feb-98
Mar-99
Apr-00
May-01
Jun-02
Jul-03
Aug-04
Sep-05
Oct-06
Nov-07
Dec-08
Jan-10
Feb-11

Linear Regression with Smoothed

Series(Central Moving Average Series)
Select Analysis-Regression-Linear
Put Westbound Truck as Dependent variable and
other variables as independent variables
Select Stepwise
as analysis mode
Click OK

23

12/22/2011

Regression Model Selection

Linear Regression Equation

Y = -562356.809 +75631.264*Michigan -13266.173*Ontario

+8.828*US GDP(billion) -1680.692*NAFTA

24

12/22/2011

Forecasting with EXCEL

Plot of westbound smoothed truck volume
and forecasting volume
90000
80000
70000
60000
50000
40000

Westbound

30000

Forecasting

20000
10000
May-11

Jan-09

Mar-10

Nov-07

Jul-05

Sep-06

May-04

Jan-02

Mar-03

Jul-98

Sep-99

Nov-00

May-97

Jan-95

Mar-96

Nov-93

Jul-91

Sep-92

May-90

Jan-88

Mar-89

Nov-86

Jul-84

Sep-85

Regression Forecasting with Seasonal

Adjustment Factor

Seasonal adjustment
factor data is derived
from central moving
average series

25

12/22/2011

Comparison
Comparing R Square of linear regression with
smoothed data and unsmoothed data
R Square
Regression with
unsmoothed data

0.942

Regression with smoothed 0.984

data

Linear regression with smoothed data has a

higher R square, this model can better fit the
forecasted and actual value

Linear Regression
Michigan GDP as one of the independent
variables instead of Michigan population and
U.S. GDP

26

12/22/2011

Forecasting
Y=155753-20609*Ontario population(million) -13133*Fuel
price+13033*NAFTA+1294*Michigan GDP(billion)
R Square: 0.989

Comparison
Comparing R Square of linear regression with
the independent variable of Michigan GDP and
the independent variables without Michigan GDP
R Square
Regression with Michigan
GDP

0.984

Regression without
Michigan GDP

0.989

Linear regression with Michigan GDP has a higher

R square, this model can better fit the forecasted
and actual value

27

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ARIMA
ARIMA(p,d,q)
o Auto-regressive model
p is the number of autoregressive terms

o Integrated model
d is the number of nonseasonal differences

o Moving average model

q is the number of lagged forecast errors in the
prediction equation

Auto-Regressive Model
The definition of autoregressive(AR) model
o Takes advantage of autocorrelation

1st order - correlation between consecutive values

2nd order - correlation between values 2 periods apart

pth order Autoregressive models

Yi = A 0 + A1Yi-1 + A 2 Yi-2 + L + A p Yi-p + i

Random Error

28

12/22/2011

Autoregressive Modeling Example

Develop the second order Autoregressive model

Excel Output
Coefficients
Intercept

13273

X Variable 1

-0.25

X Variable 2

0.128

= 13273 0.25Y +0.128Y

Y
i
i 1
i2

ACF and PACF

ACF

covariance at lag k
k = k =
variance
0
=

(Y Y )(Y Y )
(Y Y )
t +k

k : The ACF at lag k.

PACF
o The Partial Autocorrelation Function (PACF) is similar to the
ACF, however it measures correlation between observations
that are k time periods apart, after controlling for correlations
at intermediate lags.

29

12/22/2011

Autocorrelation

Using initial truck series to make autocorrelation

with SPSS
o Putting transformed data as variable
o Click Autocorrelation and Partial autocorrelation
and input maximum number of lags as 24
o Click OK

Autocorrelation of Initial Truck Series

30

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Identifying the Order of Differencing

A stationary series
o Constant mean
o Constant variance
o Constant autocorrelation structure

Nonstationary
The variability is changing

Oct-07

Dec-10

Mar-06

May-09

Jan-03

Aug-04

Jun-01

Apr-98

Nov-99

Sep-96

Jul-93

Feb-95

Dec-91

Oct-88

May-90

Mar-87

Jan-84

Series1

Aug-85

Truck Volume

Westbound truck volume

100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0

Identifying the Order of Differencing

Making the first differencing (d=1)
Differenced Data
25000
20000

10000
5000
Series1
Feb-09

May-10

Nov-07

Aug-06

Feb-04

May-05

Nov-02

Aug-01

Feb-99

Nov-97

May-00

Aug-96

Feb-94

May-95

Nov-92

Aug-91

May-90

Feb-89

Nov-87

Aug-86

5000
10000

May-85

0
Feb-84

Truck Volume

15000

15000
20000

The series appears stationary, So we decide the d=1

31

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Removing the Changing of Variability

Although the series appear stationary by
differencing once, the variability is still changing
over time. Transformation is considered for
series in which variance changes over time and
differencing does not stabilize the variance.

Box-Cox Transformation
Transformation formulation

Where is transform parameter

32

12/22/2011

Transform with EXCEL

Inputting the westbound truck volume (undifferenced)
in EXCEL
Click QI Macros Anova Tools Box cox
Inputting the transform parameter lambda with -0.7, 0.5, -0.3, 0.1, 0.3, 0.5, respectively
Dividing the transformed data into 3 components by
time and computing the standard deviation of every
component
Order of components

Time interval

Jan 84-Apr 93

May 93-Aug 02

Sep 02-Jan 11

Identifying Lambda

0
1

0.001

0
1

Series1

1
0.5
0
1

Stand Deviation

Stand Deviation

2
1.5

0.006

0.1

Lambda=0.5

Lambda=0.3
2.5

Series1

0.0005

Stand Deviation

Series1

0.0001

0.0015

Stand Deviation

0.0002

Lambda=-0.3

Lambda=-0.5
Stand Deviation

Stand Deviation

Lambda=-0.7
0.0003

26
25
24
23
22
21
20

Series1

0.004
Series1

0.002
0
1

Lambda=0.1
0.08
0.06
Series1

0.04
0.02
0
1

When lambda is 0.3, the stand deviation of the three parts

is most smoothing, we select lambda as 0.3.

33

-0.5

-1
Oct-09
Sep-10

Jan-84

Sep-10

May-09

Jan-08

Sep-06

May-05

Jan-04

Sep-02

May-01

Jan-00

Sep-98

May-97

Jan-96

Sep-94

May-93

Jan-92

Sep-90

May-89

Jan-88

Sep-86

May-85

Truck Volume
15

Nov-08

Dec-07

Jan-07

Feb-06

Mar-05

Apr-04

May-03

Jun-02

Jul-01

Aug-00

Sep-99

Oct-98

Nov-97

Dec-96

Jan-96

Feb-95

Mar-94

Apr-93

May-92

Jun-91

Jul-90

Aug-89

Sep-88

Oct-87

Nov-86

Dec-85

Jan-85

Feb-84

12/22/2011

Transforming with Undifferenced Data

35

Transformed data

30

25

20

10
Series1

Transforming with Differenced Data

2.5

Transformed and differenced data

1.5
2

0.5
1

Series1

-1.5

-2.5
-2

-3

Stationary
Seasonal

34

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Identifying AR(p)
Identify the numbers of AR by looking at the
autocorrelation function (ACF) and partial
autocorrelation (PACF) plots of differenced series

AR(p)
ACF

Tails off

PACF

Cuts after p

Moving Average Model

The definition of moving average(MA) model

: the correlation coefficient

: the series under investigation
: the residual
MA(2) model

35

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Identifying MA(q) Model

Identify the numbers of MA by looking at the
autocorrelation function (ACF) and partial
autocorrelation (PACF) plots of differenced
series

MA(q)
ACF

Cuts after q

PACF

Tails off

Differencing=0
ACF falls to zero very slowly
indicates that non-seasonal
differencing is required

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Differencing=1
ACF cuts off to zero at
lag 2 sharply, no nonseasonal differencing is
needed

PACF falls to zero slowly

and ACF cuts off to zero
after lag 1,indicating
MA(1) is needed

Identification of ARIMA(p,d,q)
P=0, d=1,q=1
The potential model is ARIMA(0,1,1)
(1B)Yt=(11B)at
t: indexes time
B: the backshift operator, BYt= BYt-1
1: the nonseasonal moving average coefficient
at: the random error

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Model with Seasonal Components

Seasonal model:

where s is seasonal cycle

P: the order of seasonal AR model
D: the order of seasonal differencing
Q: the order of seasonal MA model

Identification of P,D,Q
Differencing: 0

ACF falls to zero slowly at lags 12

and 24, indicating seasonal
differencing is needed

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ACF and PACF of Seasonal Differenced

Series
Differencing : 1

ACF cuts off to zero at lags 12 and 24 indicates no more

seasonal differencing is needed.
Both ACF and PACF do not show to cut off to zero at lags 12
and 24, indicating no seasonal AR model and seasonal MA
model are needed.

Identification of Final ARIMA(p,d,q)(P,D,Q)s

p=0,d=1,q=1
P=0,D=1,Q=0
ARIMA(0,1,1)(0,1,0)12
(1B)(1B12)Yt=(11B)at
t: indexes time
B: the backshift operator, BYt= BYt-1
B12: the seasonal backshift operator, B12Yt= BYt-12
1: the nonseasonal moving average coefficient
at: the random error

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Model Building with SPSS

R square : 0.971

Residual Graph

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Forecasting

Forecasting Results (Partial)

Forecasts of truck volume

derived from the forecasts
of transformed series

Forecasts of transformed series

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Conclusions

Growth factor
Exponential smoothing
Linear regression
ARIMA

Conclusions (contd)
Growth factor
o Advantages
Simple and easy to understand
Considering the linear and nonlinear trend of the
historical data

o Disadvantages
Neglecting the effects of cyclical or seasonal
components
Increasing the time

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Conclusions (contd)
Exponential smoothing
o Advantages
Including both linear and nonlinear
Structural view of the data that include level, trend,
seasonality, and events

o Disadvantage

The forecast is constant for all future values

Conclusions (contd)
Linear regression
o Advantage
Considering the characteristic of independent
variables and the relationship between independent
variables(economical and political factors) and
dependent variables

o Disadvantage
Difficult to determine the trends of every
independent variable

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Conclusions (contd)
ARIMA
o Advantage
The comprehensiveness of the family of models

o Disadvantages
ARIMA identification is difficult and time consuming
ARIMA may be difficult to explain to others
Models that perform similarly on the historical data
may yield quite different forecasts
Empirical

o Although there are more disadvantages than

advantages, the advantages may still outweigh
the disadvantages.

Reference
1. Daniel Beagan, Michael Fischer, Arun Kuppam.
Quick Response Freight Manual II (2007).
2. Alan Pankratz. Forecasting With Univariate
Box-Jenkins Models (1983).
3. R.M.SAKIA. The Box-Cox transformation
technique: a review (1992).

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