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  • Double Exponential Smoothing

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    Shahnewaz Parvez
    51 views11 pages
    The document discusses using double exponential smoothing to forecast monthly sales data from 2018 and 2019. It tests different combinations of alpha and beta values (0.1, 0.2, 0.3) and measures the forecast accuracy using mean squared error (MSE), mean absolute error (MAE), and mean absolute percentage error (MAPE). The results show that an alpha of 0.3 and beta of 0.3 generally provided the most accurate forecasts between the two time periods according to all three error metrics.

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    The document discusses using double exponential smoothing to forecast monthly sales data from 2018 and 2019. It tests different combinations of alpha and beta values (0.1, 0.2, 0.3) and measures the forecast accuracy using mean squared error (MSE), mean absolute error (MAE), and mean absolute percentage error (MAPE). The results show that an alpha of 0.3 and beta of 0.3 generally provided the most accurate forecasts between the two time periods according to all three error metrics.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    51 views11 pages

    Double Exponential Smoothing

    Uploaded by

    Shahnewaz Parvez
    The document discusses using double exponential smoothing to forecast monthly sales data from 2018 and 2019. It tests different combinations of alpha and beta values (0.1, 0.2, 0.3) and measures the forecast accuracy using mean squared error (MSE), mean absolute error (MAE), and mean absolute percentage error (MAPE). The results show that an alpha of 0.3 and beta of 0.3 generally provided the most accurate forecasts between the two time periods according to all three error metrics.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 11

    Double Exponential

    Smoothing
    Double Exponential Smoothing
    Tt (initial) = ((Lt+1 – Lt) + (Lt+3 – Lt-2))/2
    Tt = Beta * (At – A) + (1-Beta) * Tt-1
    At = Alpha * Tt + (1-Alpha) * (At (initial) – Tt (initial))
    Forecast = At – Tt
    Analysis & Results of 2018
    When Alpha=0.1, Beta=0.1
    Monthly Sales of the year 2018
    2500000

    2000000

    1500000

    1000000

    500000

    0
    1 2 3 4 5 6 7 8 9 10 11 12

    Net Sales / Taka Forecast


    Analysis & Results of 2018
    When Alpha=0.2, Beta=0.2
    Monthly Sales of the year 2018
    2000000

    1800000

    1600000

    1400000

    1200000

    1000000

    800000

    600000

    400000

    200000

    0
    1 2 3 4 5 6 7 8 9 10 11 12

    Net Sales / Taka Forecast


    Analysis & Results of 2018
    When Alpha=0.3, Beta=0.3
    Monthly Sales of the year 2018
    1800000

    1600000

    1400000

    1200000

    1000000

    800000

    600000

    400000

    200000

    0
    1 2 3 4 5 6 7 8 9 10 11 12

    Net Sales / Taka Forecast


    Analysis & Results of 2019
    When Alpha=0.1, Beta=0.1
    Monthly Sales of the year 2019
    1600000

    1400000

    1200000

    1000000

    800000

    600000

    400000

    200000

    0
    1 2 3 4 5 6 7 8 9 10 11 12

    Net Sales / Taka Forecast Series3


    Analysis & Results of 2019
    When Alpha=0.2, Beta=0.2
    Monthly Sales of the year 2019
    1600000

    1400000

    1200000

    1000000

    800000

    600000

    400000

    200000

    0
    1 2 3 4 5 6 7 8 9 10 11 12

    Net Sales / Taka Forecast


    Analysis & Results of 2019
    When Alpha=0.3, Beta=0.3
    Monthly Sales of the year 2019
    1600000

    1400000

    1200000

    1000000

    800000

    600000

    400000

    200000

    0
    1 2 3 4 5 6 7 8 9 10 11 12

    Net Sales / Taka Forecast


    Measuring Forecast Error
    • Measuring Forecast Error
    Error
    ­ = Actual Data-Forecast
    The Comparison of
    MSE
    For Data of 2018:
    MSE 0.1 5.60654E+11

    MSE 0.2 2.45345E+11

    MSE0.3 1.05552E+11

    For Data of 2019:

    MSE 0.1 67403833765

    MSE 0.2 71372406196

    MSE0.3 56669980686

    0.3 Is the better forecast


    The Comparison of
    MAE
    For Data of 2018:
    MAE 0.1 616819.2189

    MAE 0.2 432990.5976

    MAE0.3 293161.5835

    For Data of 2019:

    MAE 0.1 216953.3469

    MAE 0.2 218568.7642

    MAE0.3 212226.824
    The Comparison of
    MAPE
    For Data of 2018:
    MAPE 0.1 61.87%

    MAPE 0.2 42.35%

    MAPE0.3 27.76%

    For Data of 2019:

    MAPE 0.1 20.37%

    MAPE 0.2 20.91%

    MAPE0.3 19.79%

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