O'Reilly logo

Business Analysis with Microsoft® Excel, Second Edition by Conrad Carlberg

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Forecasting with Excel's Smoothing Functions

Smoothing is a way to get your forecast to respond quickly to events that occur during the baseline period. Regression approaches such as TREND and GROWTH apply the same formula to all the forecast points, and getting a quick response to a shift in the level of the baseline becomes quite complex. Smoothing is a useful way around this problem.

Projecting with Smoothing

The fundamental idea behind the smoothing approach is that each new forecast is obtained in part by moving the prior forecast in a direction that would have improved the old forecast. Here's the basic equation:

where:

t is the time period, ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required