THE FAN CHART: THE TECHNICAL DETAILS OF THE NEW IMPLEMENTATION

Our current implementation of the Fan Chart follows the original Britton Fisher and Whitley (1998) and Blix - Sellin (1998) proposal in which the inputs enter at the fourth and ninth quarters and are distributed within the forecasting horizon according to pre established weights. This procedure does not allow enough flexibility to control the shape of the distribution at the shorter end of the horizon when more reliable information is available. On the other hand, no published material presents the details of the Fan Chart computation. In this note all the technical details of the new implementation are described. This implementation provides more flexibility than the previous one since it permits the inputs to be entered on a quarterly basis instead of on a yearly basis. A Visual Basic for Excel program is available.