Smoothing Method/Abshor Marantika/Kelompok10

1. Smoothing methods
Nama Kelompok:
Vincencius Agustin Raymundho/2201754261
Hafizh Aprialdo/2201834243
Muhammad Aditya Hendrawan/2201840984
Muhammad Fadhil/2201845096

2. Definition
• Statistical technique for removal of short term
irregularities in a time series data to improve the
accuracy of forecast.

3. Types of smoothing methods
• There are two distinct groups of smoothing
methods
• 1.Averaging Methods (moving average)
• 2.Weigted averaging methods
• 3.Exponential Smoothing Methods

4. Averaging method
• A moving average is a technique to get an overall idea
of the trends in a data set, it is an average of any
subset of numbers. The moving average is extremely
useful for forecasting long-term trends.

5. Weighted Moving average method
• A Weighted Moving Average puts more weight on recent data
and less on past data.This is done by multiplying each bar’s
price by a weighting factor. Because of its unique calculation,
WMA will follow prices more closely than a corresponding
Simple Moving Average.
• Calculation:
• WMA = (P1 * 5) + (P2 * 4) + (P3 * 3) + (P4 * 2) + (P5 * 1) / (5 +
4+ 3 + 2 + 1)
• Where:
• P1 = current price
• P2 = price one bar ago, etc…

6. Exponential Smoothing method
• Exponential smoothing of time series data assigns
exponentially decreasing weights for newest to oldest
observations. In other words, the older the data, the less
priority (“weight”) the data is given; newer data is seen as
more relevant and is assigned more weight. Smoothing
parameters (smoothing constants)— usually denoted by α—
determine the weights for observations.

7. Example
• Sales of Bradl brand for the past ten weeks at NYSE
are shown on the next slide. If NYSE uses a 3-
period moving average to forecast sales, what is the
forecast for Week 6?

8. • Question:
• Week Sales
• 1 7
• 2 9
• 3 10
• 4 12
• 5 15

9. • Answer:
• (Moving average)
• Week Sales 3MA Forecast
• 1 7
• 2 9
• 3 10 8,7
• 4 12 10,3 8,7
• 5 15 12,3 10,3
• 6 12,3

10. • ( Weighted Moving Average)
• 4WMA=.3*(7)+.3(9)+.3(10)+.1(12)=9
• ( Exponential Smoothing methods)
• F1 =7
• F2=.6(7)+.4(7) =7
• F3=.6(9)+.4(7) =8,2
• F4=.6(10)+.4(8,2) =9,3
• F5=.6(12)+.4(9,3) =10,92

11. α=.6
• Week Yt Ft (Yt - Ft)2
• 2 9 7 4
• 3 10 8,2 3,24
• 4 12 9,3 7,29
• 5 15 10,92 16,65
• Sum: 31,18
• MSE Sum/4: 7,8

12. Sumber Pustaka
• http://www.businessdictionary.com/definition/smoothin
g.html
• https://www.statisticshowto.datasciencecentral.com/mo
ving-average/
• https://www.statisticshowto.datasciencecentral.com/exp
onential-smoothing/
• https://www.fidelity.com/learning-center/trading-
investing/technical-analysis/technical-indicator-
guide/wma