Exponential Smoothing: Approaches to Forecasting : A Tutorial
Exponential Smoothing
What is Exponential Smoothing?
Exponential Smoothing Forecaset with a = .3
h2. What is Exponential Smoothing?
- A type of weighted moving averaging model
- Part of many forecasting packages; ideal for developing forecasts of lots of smaller items
- Needs only three numbers:
Ft-1 = Forecast for the period before
current time period t
At-1 = Actual demand for the period
before current time period t
a = Weight between 0 and 1
- Formula
- As a gets closer to 1, the more weight put on the most recent demand number
h2. Exponential Smoothing Forecaset with a = .3
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