Application of Exponential Smoothing in the Human Resource Department
At my place of work in the human resource department, we use exponential smoothing to forecast the turnover of the sales department sales in the next year. The year’s sales are subjected to a smoothing constant that is generated from the turnover data of the past 20 years to provide a forecast of the sales turnover for the coming year. It could be solely preferred because of being easy to learn and apply. It required only three pieces of data: The turnover of sales for the current year, the smoothing constant from the previous years, and the forecast value for the present year. The method is also accurate in predicting the sales turnover for one year ahead thus, one period ahead. Finally, it is easy to evaluate the underlying phenomenon on the sales because it gives significance to variation in the forecast and actual sales turnover of previous periods.
The Application of Trend Projection in My Personal Life
In my personal life, I use trend projection to predict my financial position in the coming periods. As such, I assume that the future financial situation follows an already established secular trend. For instance, over time, my income has posted a steady annual increase. I solely use the method because of its simplicity and the fact that I have the time-series data of my yearly income since I was employed.
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The Application of Moving Average in My Investment in Securities Exchange
I have been investing in securities exchange for a while now. The analysis of the exponential moving average of the shares of interested is the fundamental principle of predicting where I will invest. As such, I use previous prices of the stock on the American Stocks exchange and compute its exponential moving average. The moving average tells me the possible trend of the share prices. I can, therefore, choose to buy the shares or not. The main reason for using the exponential moving average is its sensitivity to price change. As such, it allows me to scrutinize the slightest price change and make the necessary financial decision.
