![]() “June”, “Product A”) and dependent means the result of that choice or selection.įor example, if you plotted your observable data on a chart, it might look something like this: “Independent” means a variable you may select ( e.g. Since we are looking at a single point and we can weight the historical data by adding exponents to the calculation, this is sometimes referred to as Exponential Single Smoothing.Ī slightly more sophisticated method is called regression analysis: well, that takes me back! This is a technique where you plot an independent variable on the x (horizontal axis) against a dependent variable on the y (vertical) axis. If we go beyond this, we are then using forecast data to predict further forecast data. We are using historical data to attempt to predict the next point. EXCEL LINEST FUNCTION RETURNS ERROR SERIESTherefore the continuation of the series 8, 17, 13, 15, 19, 14, … would be 15.6, 15.7, 15.7, 15.5, 15.6, …Īll of these approaches are simplistic and have obvious flaws. As an illustration, if we picked four periods and as weights, we would be giving 10%, 20%, 30% and 40% to the last 4 points respectively which would add up to 1 (which is what it would need to do to compute the average). For example, instead of selecting a window size, it requires a list of weights (which should add up to 1). Therefore, a weighted moving average is a moving average where within the sliding window values are given different weights, typically so that more recent points matter more.
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