moving ave and smoothing

Question 1

what is Naïve forecast

Answer 1

uses recent data to predict the future

Question 2

Averaging forecast

Answer 2

forecasts are based on averages of a set number of historical data

Single and Double Moving Averages

Question 3

Smoothing forecast

Answer 3

forecasts are a weighted average of past values

Single Exponential Smoothing (SES) and Holt’s Method

Question 4

Simple Averages

Answer 4

If historical data exhibit no trend, the series would appear to be from a common distribution

Question 5

DMA

Answer 5

DMA is designed to correct the persistent forecasting errors associated with data trend.

equal weights for the past K observations.

Question 6

Single Exponential Smoothing (SES)

Answer 6

Exponential smoothing: higher weights for more recent observations

Question 7

A small α (close to zero) will give what?

Answer 7

More weights to observations from distant past and result in stable predictions based on long-run weighted averages.

Question 8

SES is not appropriate when?

Answer 8

the data has a trend

Question 9

Holt’s method

Answer 9

adjusts the current level by adding the trend in the previous period.
 This adjustment reduces the lag that exists with SES

also called Double exponential smoothing (DES)

Question 10

SES vs Holt’s Method

Answer 10

Therefore SES is a special case of Holt’s method: when there is only a single parameter (the level) to smooth.