RFID and Auto-ID in Planning and Logistics

Forecasting 219

17.8.2 douBLe exponentIAL smoothIng usIng hoLt’s method

Holt’s method is a type of double exponential smoothing designed to track time series that demon-

strate a linear trend. The method requires the specication of two smoothing constants, α and β, and

uses two smoothing equations: one for the value of the series (the intercept) and one for the trend

(the slope). The equations are

S D S G

t t t t

= + − +α α

− −

( )( )1

1 1

G S S G

t t t t

= − + −

− −

β β( ) ( )

1 1

1

The S

t

value represents the intercept at time t and the G

t

value is the slope at time t. The rst equa-

tion is very similar to that used for simple exponential smoothing. When the most current observa-

tion of demand, D

t

, becomes available, it is averaged with the prior f ...