{"id":5051,"date":"2015-04-29T07:20:52","date_gmt":"2015-04-29T01:50:52","guid":{"rendered":"http:\/\/ucanalytics.com\/blogs\/?p=5051"},"modified":"2019-06-23T19:42:11","modified_gmt":"2019-06-23T14:12:11","slug":"forecasting-time-series-analysis-manufacturing-case-study-example-part-1","status":"publish","type":"post","link":"https:\/\/ucanalytics.com\/blogs\/forecasting-time-series-analysis-manufacturing-case-study-example-part-1\/","title":{"rendered":"Forecasting & Time Series Analysis – Manufacturing Case Study Example (Part 1)"},"content":{"rendered":"
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Today we are starting a new case study example series on YOU CANalytics involving forecasting and time series analysis. In this case study example, we will learn about\u00a0time series analysis for a manufacturing operation. Time series analysis and modeling have many business and social applications. It is extensively used to forecast company sales, product demand, stock market trends, agricultural production etc. Before we learn more about forecasting let’s evaluate our own lives on a time scale:<\/p>\n

Life is a Sine Wave<\/span><\/h2>\n
\"Time

Time Series Analysis; Life’s Sine wave – by Roopam<\/p><\/div>\n

I learnt a valuable lesson in life when I started my doctoral research in physics & nano-technology. I always loved physics, but during my doctoral studies, I was not enjoying the aspect of spending all my time in an isolated lab performing one experiment after another. Doing laboratory research could be extremely lonely. Additionally, I always enjoyed solving more applied and practical problems which I believed was missing in my research work. After getting frustrated for some time I decided to take some career advise from a trusted physicist friend. Before you read further, I must warn you that physicists as a community are usually\u00a0mathematical, and occasionally philosophical. Physicists prefer to create a simple mathematical model about a complicated situation. They slowly add complexity to this simple model to make it fit with reality.\u00a0The following is the key point I discovered during that conversation with my friend.<\/p>\n

A simple model for\u00a0life is a sine wave\u00a0– where we go through ups and downs of moods and circumstances. Like a sine wave, we don’t spend much of our time either on the peaks or the troughs but most of our\u00a0time is spent climbing up or sliding down. Now keeping these moods and circumstances cycle in mind, a perfect choice of\u00a0career is where one could enjoy both climbs and slides – as the up and down cycle is inevitable in life.<\/p>\n

Keeping the above in mind I prepared a list of\u00a0keywords that I associated with a job that I can truly love to absorb the up and down cycle of life. The following is my list of keywords:<\/p>\n\n\n\n\n\n
Practical problem-solving<\/td>\n\u00a0Mathematics<\/td>\n\u00a0Creativity<\/td>\n<\/tr>\n
Working with people\u00a0on smart solutions<\/td>\nScientific investigation<\/td>\n\u00a0Learning every day<\/td>\n<\/tr>\n
Seeing\u00a0the\u00a0fruits of my efforts reasonably fast<\/td>\nProducing\u00a0quantifiable business benefits<\/td>\nKnowledge sharing<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

This prompted me to change my career from laboratory research to data science and business consulting.\u00a0I am lucky that my career in data science and business\u00a0analytics for over a decade has allowed me to check mark all these keywords.<\/p>\n\n\n\n
Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven\u2019t found it yet, keep looking. Don\u2019t settle. As with all matters of the heart, you\u2019ll know when you find it. And, like any great relationship, it just gets better and better as the year’s roll on. So keep looking until you find it. Don\u2019t settle. – Steve Jobs<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Interference of Other\u00a0waves<\/span><\/h2>\n

\"SineNow in the true tradition of physics, let me add some complexity to the simple sine wave model for life. We live in a society and interact with many people. Everyone around us has a different shape to their lives’ sine waves. The interference of different regular and predictable sine waves can produce patterns that are highly irregular and could at times be close to randomness.<\/p>\n

This is what is displayed in the adjacent chart where the product of four harmonic sine waves is an irregular shape at the bottom. Eventually, our actual\u00a0lives’ function looks more like an irregular pattern produced through the interference of several sine waves.<\/p>\n\n\n\n
On some level the above is the fundamental principle behind Fourier series and Fourier transforms; most engineering and physics students will get a cold chill of fear at the mention of Fourier series. However, the basic idea\u00a0is simple that the linear combination of sine and cosine functions (similar to our lives’ sine waves) can produce any complicated patterns including the irregular function we observed and much more complicated Fractals. I find it\u00a0absolutely wonderful that a\u00a0combination of harmonic motions can produce absolutely irregular patterns!<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Time Series Analysis – Decomposition<\/span><\/h2>\n

\"Time<\/a><\/p>\n

Now, let me try to create a connection between what we discussed above with time series analysis and forecasting. The fundamental idea for time series analysis is to decompose the original time series (sales, stock market trends, etc.) into several independent components. Typically, business time series are divided into the following four components:<\/p>\n