Impact of Forecast Uncertainty on Feeder-Cable Sizing

A feeder route is a major network of cables extending from the central office to within xk mile or so of customers.1 When a feeder route needs relief, a cable size is selected with the goal of minimizing the discounted sum of costs over time. Because of forecast errors, however, sometimes a cable that is larger or smaller than the optimum is placed. One often hears that the feeder-cable sizing curves are so flat that sizing decisions are relatively insensitive to forecast errors. On the other hand, a small percentage of a large construction program still represents a substantial amount of money. In this paper we attempt to quantify the impact of forecast deviations on the feeder network by first estimating the error distribution and then using it to examine the effect of forecast errors on feeder-cable sizing. While it is not presented here, a preliminary study indicates that the impact of forecast deviations on feeder-cable relief timing is at least as great as that on sizing. 677 In this section, we derive an estimate for the distribution of forecast errors using data from the central office forecast measurement plan. It should be noted that all deviations between forecast and actual are included here under the forecast error category. Thus the forecast errors include some deviations caused by count errors and others caused by boundary changes that have not been reflected accurately in the records. 2.1 Nomenclature