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Smoothing Forecast Analysis

Week Widgets Smoothed ChartObject Chart 1
No. Sold Forecast
1 40 #N/A
2 90 40.00
3 100 80.00
4 110 96.00
5 90 107.20
6 120 93.44
7 109 114.69
8 96 110.14
9 80 98.83
10 120 83.77
11 130 112.75
12 200 126.55
13 190 185.31
14 180 189.06
15 200 181.81
Forecast For Week 16 196.36
The fundamental idea behind smoothing is that each new forecast is obtained in part by moving the prior forecast in a direction that would have improved the old forecast. The equation is: F[t+1] = F[t] + a x e[t] where:
1. t is the time period
2. F[t] is the forecast at time t, and F[t+1] is the forecast at the time period immediately following time t
3. a is the smoothing constant (Never exceed .7)
4. e[t] is the error: the difference between the forecast for time t and the actual observation at time t

How do you use it? Enter your business units (widgets) and this sheet will forecast unit sales for you.

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