![]() ![]() ➤ Select the Output Range (where you want your EMA calculation). Insert the value of α in the box Damping factor.įor this example, we have taken α as 0.3. ➤ Select the cells with sales data in the Input Range box ( including the empty cell of the forecast period). ![]() Now, in the Exponential Smoothing window, ➤ Select Exponential Smoothing and click on OK. ➤ Go to the Data tab and click on Data Analysis. ➤ Check on Analysis ToolPak and click on OK. For that, first, you have to add this ToolPak to your Excel. We can apply the Exponential moving average to forecast future data by using the Data Analysis ToolPak. Using Data Analysis Toolpak to Calculate Exponential Moving Average in Excel Now we want to forecast the sales data for January 2021 using Exponential Moving average.ġ. Suppose, we have the following dataset where we have sales data of 12 months in 2020. α can also be calculated by the following formula, α = 2/(n+1) here, n is the number of periods. The ideal range of α lies between 0.1 to 0.3. The more the value of alpha, the more weight is given to the past data. Where, EMA t = Exponential moving average of current period The importance of the most recent data decreases as the time period lengthens. Therefore smoothening in the case of the exponential moving average in Excel is higher than that of the simple moving average. The Exponential Moving Average ( EMA), also known as the exponentially weighted moving average, is a kind of moving average that gives more weight to recent data than the simple moving average. Related Articles Exponential Moving Average in Excel (EMA)
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