The choice of the smoothing constants, α and β, has a
considerable effect on the accuracy of the forecasts obtained by
using exponential smoothing with trend.
For each of the following time series, set α = 0.2 and
then compare MAD obtained with β = 0.1, 0.2, 0.3, 0.4, and 0.5.
Begin with initial estimates of 50 for the average value and 2 for
the trend.
Step 1) Change the Beta Value and a graph for each of the 5
given Beta values in each of the 3 databases. one graph per tab
with 5 separate lines. The graphs is already part of the
spreadsheet for the beta value
Step 2) the impact of the Beta value on the 3 databases.
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Template for Exponential Smoothing Forecasting Method with Trend Exponential Latest Estimated Smoothing Forecasting Trend Trend Forecast Error 0 #VALUE! Time True Period Value 1 2 3 4 5 Beta Smoothing Constants a BE Range Name Cells Alpha J6 J7 Estimated Trend E6:E35 Forecast F6:F35 Forecasting Error G6:G35 InitialEstimate Average J10 InitialEstimate Trend J11 Latest Trend D6:D35 MAD J14 MSE J17 TrueValue C6:C35 Initial Estimates Average = Trend = 6 7 8 9 Mean Absolute Deviation MAD = #DIV/0! Mean Square Error MSE = #DIV/0! 1 1 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 1 1 - True Value - Forecast 0 0 0 0 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 Time Period 10.24a 10.24b 10.24c +
Template for Exponential Smoothing Forecasting Method with Trend Time True Period Value 1 2 Exponential Latest Estimated Smoothing Forecasting Trend Trend Forecast Error 0 #VALUE! Smoothing Constants 1 C B = 3 Initial Estimates Average = Trend = Range Name Cells Alpha J6 Beta J7 Estimated Trend E6:E35 Forecast F6:F35 Forecasting Error G6:G35 : InitialEstimate Average J10 InitialEstimate Trend J11 Latest Trend D6:D35 MAD J14 MSE J17 TrueValue 06:C35 Mean Absolute Deviation MAD = #DIV/0! Mean Square Error MSE = #DIV/0! 1 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 29 30 1 1 1 1 AIRA 1 True Value - - Forecast 0 0 0 0 0 1 3 5 7 9 11 13 15 15 17 19 21 23 25 27 29 Time Period 10.24a 10.24b 10.24c +