Exponential smoothing
Hey kiddo! Do you know what a forecast is? It's when we try to guess what's going to happen in the future. Kind of like how you try to guess what toys you might get for Christmas.
Exponential smoothing is a way to make better guesses about the future by looking at past data. We call the past data "history". It helps us make a forecast that is not too high or too low, but just right!
Imagine you have a lemonade stand and you want to know how much lemonade to make tomorrow. If you just guess, you might make too much and be stuck with extra or make too little and run out. That wouldn't be good for business, right?
Instead, you can use exponential smoothing to make a better guess. First, you look at how much lemonade you sold on previous days. Then, you use a special formula that looks at the recent history more than the older history. It's like giving more importance to what happened recently because that is most likely to affect tomorrow's sales.
Finally, you get a number that tells you how much lemonade you should make tomorrow! You can adjust this number based on other things you know, like whether it's going to be hot or rainy outside.
Exponential smoothing helps businesses make better decisions by giving them a more accurate forecast of what might happen in the future. It's like having a crystal ball that helps you make smart choices!
Exponential smoothing is a way to make better guesses about the future by looking at past data. We call the past data "history". It helps us make a forecast that is not too high or too low, but just right!
Imagine you have a lemonade stand and you want to know how much lemonade to make tomorrow. If you just guess, you might make too much and be stuck with extra or make too little and run out. That wouldn't be good for business, right?
Instead, you can use exponential smoothing to make a better guess. First, you look at how much lemonade you sold on previous days. Then, you use a special formula that looks at the recent history more than the older history. It's like giving more importance to what happened recently because that is most likely to affect tomorrow's sales.
Finally, you get a number that tells you how much lemonade you should make tomorrow! You can adjust this number based on other things you know, like whether it's going to be hot or rainy outside.
Exponential smoothing helps businesses make better decisions by giving them a more accurate forecast of what might happen in the future. It's like having a crystal ball that helps you make smart choices!
Related topics others have asked about: