Monthly sales of an Australian wine in thousands of litters from January 1980 un
ID: 3180277 • Letter: M
Question
Monthly sales of an Australian wine in thousands of litters from January 1980 until July 1995 are plotted below.
Which exponential smoothing method would you use to smooth the data and produce forecasts for the next 6 months? Justify your selection. (Use the TS plot and appropriate terminology.)
Simple exponential smoothing
Holt’s trend exponential smoothing
Additive Holt Winters
Multiplicative Holt Winters
Time Series Plot of sweetw 700 600 500 400 300 200 100 1 19 38 57 76 95 114 133 152 171 IndexExplanation / Answer
The simplest of the exponentially smoothing methods is naturally called “simple exponential smoothing” (SES). (In some books, it is called “single exponential smoothing”.) This method is suitable for forecasting data with no trend or seasonal pattern.
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