- [Instructor] I'm in exercise file 01_02_Begin…in the using beta as a cell name worksheet.…Excel has a feature that makes your work go a lot quicker,…helps to avoid careless errors,…and makes the documentation of a worksheet much easier.…That feature is defined names.…Here, you can put the level smoothing constant in a cell…and then give that cell the name alpha.…You can do the same thing with the trend smoothing constant.…
Put it in a cell and name the cell beta.…Suppose that you define the name beta for cell J2.…If so, your formula for the next forecast of the trend value…could be more self documenting.…In this case, the name beta stands for cell J2,…but it has meaning beyond the simple address…that results from the intersection of a column and a row.…And, as you'll see shortly, the name can redefine itself…depending on what cell you use it in.…All by itself, it's a small thing…and if that were all there was to it,…I'd define to name might not be much of a tool.…
But defined names have a couple of characteristics…
- Identify what distinguishes seasonality from a trend or a cycle.
- Explore how to use absolute and relative references in defined names, and recall that absolute reference always remain static while relative references change depending on precedent.
- Identify seasonality in a baseline by examining autocorrelation functions in a correlogram.
- Explore how to initialize seasonal effects in a baseline.
- Forecast the current level of the baseline and the current seasonal effect from prior observations, forecasts, and smoothing constants.
- Quantify a measure of the aggregate error in a forecast, and minimize it using Solver.
- Establish a baseline in a data object and forecast from that baseline in R.
- Compare Excel and R results.