HP 12C - Selecting the Best Smoothing Constant

90
Selecting the "best" smoothing constant (α):
1. Key in the program and press CLEAR .
2. Key in the number 1 and press .
3. Key in the "trial " and press 0 1.
4. Key in the first historical value (X
1
) and press 2.
5. Key in the second historical value (X
2
) and press 6 . The
result is the error between the forecast value (
t+1
) and the true value
(X
t+1
)
6. Press ; the display shows the next forecast (
t+2
).
7. Optional: Press 5 to display the smoothed estimate of current
demand.
8. Continue steps 5 and 6 for X
3
, X
4
, ... X
n
until all historical values have
been entered. When doing step 5 merely key in the value and press
(do not press 6).
9. Press 4. This value represents the cumulative forecasting error
(Σe
2
). Record the value and the following additional values; press 0
(α), 2 (smoothed average S
t-1
), 3 (trend T
t-1
) and 6
(forecast
t+1
).
10. Press CLEAR .
11. Repeat steps 2 through 10 until a "best" α is selected based on the lowest
cumulative forecasting error (Register 4).
Forecasting:
6
42- 44 6
00
43-43, 33 00
REGISTERS
n: Unused i: Unused
PV: Unused PMT: Unused
FV: Unused
R
0
: α
R
1
: 1-α R
2
: S
t-1
R
3
: T
t-1
R
4
: Σe
2
R
5
: D
t
R
6
:
t+1
R
7
-R
.4
: Unused