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In Establishing a Single Exponential Smoothing Forecasting Model, a Starting

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In establishing a single exponential smoothing forecasting model, a starting point for the forecast value for period 1 is required. One method for arriving at this starting point is to use the first data point as the forecast for that period. If we do that, then the first data point should be ignored when computing measures of forecast error.

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Definitions:

Asset Account

A category within the general ledger that reports the value of a company's assets such as cash, equipment, and property.

Liability Account

An accounting record that reports the amounts a company owes to creditors and other parties, often categorized as current or long-term.

Owner's Equity Account

Represents the total amount of capital the owner has in a business after liabilities have been subtracted from assets.

Transaction

An agreement or exchange between two parties that involves the sale, purchase, or trade of goods, services, or financial assets.

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