Smoothing (a = 0.50): a*yt + (1-a)*yt-1 Holt's trend method (a = 0.50, b = 0.

22
t Sales Var Sales Y* |e| = |y - Y*| e^2 L b
1 5 5 0
2 8 0.60 6.5000 0.3349
3 12 0.50 6.5000 5.5000 30.2500 9.4175 0.9116
4 13 0.08 9.2500 3.7500 14.0625 11.6645 1.2098
5 12 -0.08 11.1250 0.8750 0.7656 12.4372 1.1122
6 10 -0.17 11.5625 1.5625 2.4414 11.7747 0.7159
7 14 0.40 10.7813 3.2188 10.3604 13.2453 0.8844
8 12.3906

Variation in sales 0.2233

1) Parámetros (Holt's trend method)

Alpha (a) - Level 0.5000 0.5000
Beta (b) - Trend 0.2233

2) Evaluación de resultados (desviaciones)

MAE (Mean Absolute Error) 2.9813
MSE (Mean Square Error) 11.5760
RMSE (Root Mean Square Error) 3.4023

3) Análisis alternativo (medidas alternativas)

a) Naive method (yt+1 = yt) 14
b) Simple average (mean y) 10.57
c) Moving average (t-2 to t-1) 12.00
d) Weighted moving average (t-3= 12.40
0.2, t-2= 0.3, t-1= 0.5)
nd method (a = 0.50, b = 0.2233) Holt's trend method (a = 0.90, b = 0.2233)
Y* |e| = |y - Y*| e^2 L b Y* |e| = |y - Y*| e^2
5 0
5.0000 3.0000 9.0000 7.7000 0.6029 5.0000 3.0000 9.0000
6.8349 5.1651 26.6779 11.6303 1.3459 8.3029 3.6971 13.6687
10.3291 2.6709 7.1339 12.9976 1.3507 12.9762 0.0238 0.0006
12.8743 0.8743 0.7644 12.2348 0.8787 14.3483 2.3483 5.5144
13.5493 3.5493 12.5978 10.3114 0.2530 13.1136 3.1136 9.6943
12.4906 1.5094 2.2784 13.6564 0.9435 10.5644 3.4356 11.8034
14.1297 14.5999

0.9000
0.2233

2.7948 2.6031
9.7421 8.2802
3.1212 2.8775
Holt's trend method: Key concepts
Trend (slope) = dY / dX --> dY = yt - yt-1
Lt = a*yt + (1-a)*(Lt-1+bt-1)
bt = B*(Lt - Lt-1) + (1-B)*bt-1
yt+1 = Lt + bt
Lt=1 = yt (yt=1) , bt=1 = 0

For forecast results:

Equation --> Y* (yt+1) = Lt + h*bt

h = time trend (change)
if years --> h = 1