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Exponential Smoothing Example:: Single Years Quarter Period Sales Avg A (T) /avg

This document presents an example of using exponential smoothing to forecast time series sales data. It provides quarterly sales figures from 1990 to 1996 for a single product. Two exponential smoothing models are applied to the data using alpha values of 0.45 and 0.05. The forecasts generated by each model are plotted against the actual sales to compare how well each model fits the data, with the alpha=0.45 model providing a better fit based on its lower mean squared error.

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Pravin K Yadav
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59 views6 pages

Exponential Smoothing Example:: Single Years Quarter Period Sales Avg A (T) /avg

This document presents an example of using exponential smoothing to forecast time series sales data. It provides quarterly sales figures from 1990 to 1996 for a single product. Two exponential smoothing models are applied to the data using alpha values of 0.45 and 0.05. The forecasts generated by each model are plotted against the actual sales to compare how well each model fits the data, with the alpha=0.45 model providing a better fit based on its lower mean squared error.

Uploaded by

Pravin K Yadav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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EXPONENTIAL SMOOTHING EXAMPLE:

Single
Years

90

91

92

93

94

95

96

900

800

700

600

500

400

Quarter

Period

Sales

1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

362
385
432
341
382
409
498
387
473
513
582
474
544
582
681
557
628
707
773
592
627
725
854
661

avg

380

419

510.5

591

675

716.75

A(t)/avg

0.95
1.01
1.14
0.90
0.91
0.98
1.19
0.92
0.93
1.00
1.14
0.93
0.92
0.98
1.15
0.94
0.93
1.05
1.15
0.88
0.87
1.01
1.19
0.92
0.92
1.01
1.16
0.92

Forecast
alpha
0.45

362
372
399
373
377
391
439
416
442
474
522
501
520
548
608
585
604
651
706
655
642
679
758
714
690
677
670

700

600

500

400

300

200

100

0
1

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

Data for the example from NIST/SEMATECH e-Handbook of Statistical Methods, http://www
Single
Forecast
alpha
0.05
MSE
529.0
3558.1
3386.4
80.9
1020.6
11357.3
2744.3
3270.4
5105.6
11728.7
2346.0
1880.1
3825.2
17693.4
2584.8
1852.2
10541.3
14998.6
12914.5
756.4
6868.0
30478.3
9405.3

6909.8

MSE
362
529.0
363
4740.3
367
655.0
365
278.5
366
1836.4
368 16824.7
375
149.4
375
9528.4
380 17618.0
387 38062.5
397
5981.7
401 20584.9
408 30380.7
416 70005.5
430 16219.6
436 36859.5
446 68324.2
459 98796.8
474 13830.6
480 21527.7
488 56352.7
499 125682.9
517 20676.1
524
498
473
450
29367.2
900

800

700

600

500
Sales
Forecast
400

700

600

500
Sales
Forecast
400

300

200

100

0
20

21

22

23

24

25

26

27

28

10 11 12 13 14 15

of Statistical Methods, http://www.itl.nist.gov/div898/handbook/

Sales
Forecast

Sales
Forecast

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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