Those who have knowledge, don't predict' Those who predict, don't have knowledge'

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• "Those who have knowledge, don't predict. Those
  who predict, don't have knowledge. "
• --Lao Tzu, 6th Century BC Chinese philosopher

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Forecasting using exponential smoothing method
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• Part 1. Theory
• Part 2. Using Excel demonstration. Forecasting a
  number of library visitors
• Assignment 1, 2

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Learning objectives

• To learn how to use moving exponential smoothing
  method in forecasting

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Main idea of the method

• Main idea of the method smoothing down
  variations in the data. Forecast error for the
  previous period is taken into account.

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Prerequisite data pattern
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Evaluation of the method

• Advantages rather simple method More recent
  data are considered as being more influential.
• Shortcomings Not applicable when trend exists
  No definite rule of choosing its parameters

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Switch to Excel

• Open the Workbook Exponential_smoothing.xls

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Using Data Analysis ToolPak in Excel

• Tools ? Data Analysis ? Exponential smoothing
• Note if you dont find Data Analysis, it may be
  not installed Tools ? Add Ins Analysis ToolPak
  should be checked.

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Part 2. Working with Excel

• Forecasting a number of visitors of a small
  library. Demonstration of the forecasting
  procedure using exponential smoothing method
• Assignment 1. Repeating of the forecasting
  procedure with the same data
• Assignment 2. Repeating of the forecasting
  procedure with the same data but different
  parameter (damping factor).