VoseTimeSMEThreePoint

 

VoseTimeSMEThreePoint({Min Values}, {Mode Values}, {Max Values}, Distribution Type, Correlation Factor)

Time series function modeling a variable estimated for each period by minimum, most likely and maximum values.

  • {MinValues} is an array of the minimum possible values for each period of the forecast.

  • {ModeValues} is an array of the most likely values for each period of the forecast.

  • {MaxValues} is an array of the maximum possible values for each period of the forecast.

  • DistributionType is a text (either “TRIANGLE” or “PERT) determining whether the min, mode and max for each period will specify a Triangle or PERT distribution.

  • CorrelationFactor applies a positive correlation between generated values within each period of the series. CorrelationFactor must lie on [0,1]. Optional, set to zero if omitted.

Explanation and Uses

The SMEThreePoint time series function provides an easy, subjective way to specify a time series with some key features:

Growth and spread over time can be controlled by changing the {MinValues} and {MaxValues} array values. More likelihood is attributed to values close to the {ModeValues} so emphasis can be placed on those values you feel are most plausible.

Correlation between periods can be specified with a single parameter. The level of correlation is best selected by reviewing the example pathways that are generated in the interface each time one clicks the Generate button. Look at the range of variation from one period to the next across the entire series and adjust the CorrelationFactor until it looks reasonable. If you believe that there is correlation across the series you will likely settle on a value above 0.4 since lower levels of correlation are not immediately obvious to the eye. You will want to use correlation, for example, when the variable being forecast will tend to be high in each year if it is high in the first year: for example, a forecast of sales of a new product, when it either takes off because it is appealing to potential clients, or doesn’t; or the use of a new vaccine where people are generally convinced of its value, or not.

Level of the spread within the {MinValues} to {MaxValues} range can be controlled somewhat by selecting the DistributionType. For more spread select “Triangle” and for less spread select “PERT”. Selecting “Triangle” will also make the mean value for each period equal to the average of (MinValue, ModeValue, MaxValue), whilst selecting “PERT” will give a mean that is the weighted average of these values, with four times more weight on the ModeValue (so the mean will then be closer to the ModeValue). Click here for a more detailed comparison of the Triangle and PERT distributions. The following graph illustrates the effect of selecting either Triangle or PERT. Each plot is of 100 simulated pathways. The Triangle version on the left has more spread than the PERT on the right.

 

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