Question: Consider the linear trend model: It = b + bat + t, &~ N(0,0%). One form of forecasting that is equivalent to the double exponential

Consider the linear trend model: It = b + bat +

Consider the linear trend model: It = b + bat + t, &~ N(0,0%). One form of forecasting that is equivalent to the double exponential smoothing taught in class is as follows: #T+ (T) = S + -6,(T) + TZ(T), where the estimate of the trend component is b2(T) = a(ST ST-1)+(1 - a) 62 (T 1) and St =axt + (1 - a) Sr-1. This is called exponential smoothing, corrected for trend. Show that this method will give an unbiased forecast for the linear trend model

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!