What is adaptive-response-rate single exponential smoothing?

Adaptive-response-rate single exponential smoothing is a forecasting technique that adjusts the smoothing parameter in single exponential smoothing based on the accuracy of previous forecasts. In traditional single exponential smoothing, a fixed smoothing parameter is used to exponentially decrease the weight of older data in the forecast. However, this approach may not perform well in scenarios where the underlying data pattern changes over time. Adaptive-response-rate single exponential smoothing addresses this issue by dynamically adjusting the smoothing parameter based on the accuracy of recent forecasts. When the forecast is accurate, indicating a stable data pattern, the smoothing parameter remains low to give more weight to recent data. Conversely, when the forecast is less accurate, indicating a changing data pattern, the smoothing parameter increases to give more weight to historical data. By adapting to changes in the data pattern, this technique provides improved accuracy in forecasting.

This mind map was published on 16 November 2023 and has been viewed 46 times.