Time Series Forecasting Exercise
Simple Exponential Smoothing
		Simple		alpha=	0.3
		Exponential			Percent	Squared
Period	Sales	Smoothing	Error	Abs. Error	Error	Error
1	99	N/A
2	88	99.0	-11.0	11.0	12.50%	121.0
3	50	95.7	-45.7	45.7	91.40%	2088.5
4	58	82.0	-24.0	24.0	41.36%	575.5
5	62	74.8	-12.8	12.8	20.63%	163.7
6	60	71.0	-11.0	11.0	18.26%	120.0
7	55	67.7	-12.7	12.7	23.03%	160.5
8	62	63.9	-1.9	1.9	3.01%	3.5
9	71	63.3	7.7	7.7	10.83%	59.2
10	65	65.6	-0.6	0.6	0.95%	0.4
			-12.43	14.14	24.66%	365.80
			BIAS	MAD	MAPE	MSE
		Standard Error (Square Root of MSE) =				19.1
Simple Exponential Smoothing
Forecast t = (alpha x actual t-1) + ((1- alpha) x forecast t-1)
Example:
Please use the simple exponential smoothing to forecast the sales for Period 11.
Forecast Period 11 = (alpha x actual Period 10) + ((1- alpha) x forecast Period 10)
Forecast Period 11 = (0.3 x 65) + ((1- 0.3) x 65.6)
Forecast Period 11 = 65.42
Note:
By using Simple Exponential Smoothing, the forecast for Period 1 = NA
By using Simple Exponential Smoothing, the forecast for Period 2 = Actual Period 1
By using Simple Exponential Smoothing, the forecast for Period 3 = (alpha x actual Period 2) + ((1- alpha) x forecast Period 2)