Why smoothing techniques

Please feel free to share your thoughts. Data Analytics. Table of Contents. Author Recent Posts. Follow me. Ajitesh Kumar. I would love to connect with you on Linkedin and Twitter. Latest posts by Ajitesh Kumar see all. Tagged with ai , nlp. Two, it needs the actual value for that time period. And three, it needs the value of the smoothing constant, a weighting factor that reflects the weight given to the most recent data values.

It produces accurate forecasts. An exponential smoothing method produces a forecast for one period ahead. Using the trend projection technique, forecasts for more periods ahead can then be generated. The forecast is considered accurate as it accounts for the difference between actual projections and what actually occurred.

It gives more significance to recent observations. Whiles one business organization is using strategic means and proper accounting methods for its income smoothing, another may be using dubious or unscrupulous means for hedging its income.

Though an income smoothing practice being used by a company may be legal, it may not be ethical. Accounting has its general guidelines such as neutrality, full disclosure, comparability, consistency etc.

Any income smoothing practice which violates any of these would be unethical. In a nutshell, income smoothing cannot be outrightly classified as an illegal or unethical act, only that some persons resort to using ill means to achieving the same goal. There are various reasons why accountants of business corporations resort to income smoothing.

Some of these include:. Not yet a member? Sign Up. Other JavaScript in this series are categorized under different areas of applications in the MENU section on this page. Professor Hossein Arsham A time series is a sequence of observations which are ordered in time. Inherent in the collection of data taken over time is some form of random variation. There exist methods for reducing of canceling the effect due to random variation. Widely used techniques are "smoothing".

These techniques, when properly applied, reveals more clearly the underlying trends. Enter the time series Row-wise in sequence, starting from the left-upper corner, and the parameter s , then click the Calculate button for obtaining one-period-ahead forecasting. Blank boxes are not included in the calculations but zeros are.