1) 5 year Exponential Moving Average | year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Sales | 5.2 | 4.9 | 5.5 | 4.9 | 5.2 | 5.7 | 5.4 | 5.8 | 5.9 | 6 | 5.2 | 4.8 |
Calculate 5 year Exponential Moving Average
Solution:
`alpha=2/(n+1)=2/(5+1)=0.3333`
(1)
year | (2)
Sales | (3)
Exponential Smoothing
`(alpha=0.3333)` |
| 1 | 5.2 | 5.2 |
| 2 | 4.9 | `0.3333*5.2+0.6667*5.2=5.2` |
| 3 | 5.5 | `0.3333*4.9+0.6667*5.2=5.1` |
| 4 | 4.9 | `0.3333*5.5+0.6667*5.1=5.2333` |
| 5 | 5.2 | `0.3333*4.9+0.6667*5.2333=5.1222` |
| 6 | 5.7 | `0.3333*5.2+0.6667*5.1222=5.1482` |
| 7 | 5.4 | `0.3333*5.7+0.6667*5.1482=5.3321` |
| 8 | 5.8 | `0.3333*5.4+0.6667*5.3321=5.3547` |
| 9 | 5.9 | `0.3333*5.8+0.6667*5.3547=5.5031` |
| 10 | 6 | `0.3333*5.9+0.6667*5.5031=5.6354` |
| 11 | 5.2 | `0.3333*6+0.6667*5.6354=5.7569` |
| 12 | 4.8 | `0.3333*5.2+0.6667*5.7569=5.5713` |
| 13 | | `0.3333*4.8+0.6667*5.5713=5.3142` |
This material is intended as a summary. Use your textbook for detail explanation.
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