Concept explainers
If you are using exponential smoothing for forecasting an annual time series of revenues, what is your forecast for next year if the smoothed value for this year is
State the forecasted value for the next year.
Answer to Problem 1PS
The forecasted value for the next year is
Explanation of Solution
Exponentially smoothing is a weighted average cost of all the previous time periods. Therefore, the smoothed value in the current time period works as the forecast of the value in the following year.
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