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Time Series Forecasting with Excel

For versions of Excel: Excel for Office 365, Excel for Office 365 for Mac, Excel 2016, Excel 2016 for Mac, Excel 2013, Excel 2011 for Mac, Excel 2010, Excel 2008 for Mac, Excel 2007

This is a video demonstration of Excel weighted moving average and single exponential smoothing forecasting.

This is the third part in a series on forecasting. Part I can be found here and discusses moving averages, calculation and interpretation. Part II can be found here, and discusses weighted moving averages and single exponential smoothing. If you are not familiar with time series forcasting it will be helpful to watch these two videos first. This video is a continuation of and covers the evaluation of a forecaasting method with Theil's U.

Theil's U

Theil's U is a statistic used to evaluate whether or not a forecasting model is superior to naive forecasting. Values less than 1 indicate the model is superior, while values greater than 1 indicate the model is worse than naive forecasting. The statistic is calculated as the square root of the ratio of the sum of the squared errors, forecasting model to naive forecasting.

This tutorial demonstrates the calculation and interpretation of Theil's U. You can download the spreadsheet used in this tutorial here.