Business Statistics

592 Business Statistics

FigUre 16.29

SPSS output for Example 16.4

16.12 DOUBLE EXPONENTIAL SMOOTHING

Single exponential smoothing does not incorporate trend and seasonal components of time series data.

There are techniques by which trend and seasonal components can be incorporated in a time series,

subject to their existence. In this section, we will focus upon the exponential smoothing method which

considers trend effects in forecasting. Holt’s two parameter technique is a technique which includes

trend effects in forecasting. Holt’s double exponential smoothing method for a period t

is given by

Forecast for the next period (F

t+1

) = E