Develop a forecast for
Answer to Problem 18E
The forecast for
Explanation of Solution
Calculation:
The given data represents time series data.
The equations for Holt’s linear exponential smoothing method is,
Where
For week 1:
Consider
From given data, it can be observed that
Therefore,
Now,
Consider k=1 the
The equation
For week 2:
The equation
Substitute
The equation
Substitute
The equation
Similarly the remaining estimated levels, estimated trend and forecasts are obtained as follows:
t | Value | Estimated Level | Estimated trend | Forecast |
1 | 6 | 6 | 5 | |
2 | 11 | 11 | 5 | 11 |
3 | 9 | 13.90 | 3.95 | 16 |
4 | 14 | 16.70 | 3.37 | 17.85 |
5 | 15 | 18.55 | 2.61 | 20.07 |
The forecast for week 6 is,
Substitute
Thus, the forecast for
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Chapter 17 Solutions
Statistics for Business & Economics, Revised (MindTap Course List)
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