10.6. Exponential Smoothing Tool

The Exponential Smoothing tool does the exponential smoothing for the given set of values. Each value in the new smoothed set is predicted based on the forecast for the prior period. The formula to calculate the forecast is: F(t+1) = F(t) + (1 - dampingFactor) * (A(t) - F(t)), where A(t) is the t'th value in the original data set.

You can define the prior forecast adjustment in the "Damping factor" entry. A good value could be, for example, between 0.2 and 0.3 representing 20 to 30 percent error adjustment in the prior forecast.