Join Conrad Carlberg for an in-depth discussion in this video Software setup, part of Business Analytics: Forecasting with Trended Baseline Smoothing.
- [Instructor] Let's take a minute to go over the software requirements in this course. We'll be using R and Microsoft Excel to dig down into the data and make analyses. Let's start with R first. You need to download version 3.4.0, not the latest version. You can simply Google that and download it from the CRAN website. Go ahead and install it per the Wizard. We're not using the latest version because there is an unresolved issue with the library and packages that I want to demonstrate in this course.
The problem may very well be fixed by the time that you watch it. I also wanna point out that I'm using Windows. I'm not a Mac user. So I recommend that you research the Mac equivalent of what I'm doing. You shouldn't run into any issues if you just follow along. But I wanna put that out there just in case. Once the R software is installed launch the R 64 bit version. The first thing we'll have to do is select the CRAN mirror. We can do that from the packages menu.
I'll select a California site. We can now download the packages that we need. From the same packages menu select install packages. From the list that pops up choose DescTools and press OK. The package will then be installed. Next we need to invoke the DescTools library. We can do that using the library function, passing DescTools, capital D, capital T, as the argument.
Now let's quickly test a function we'll be using. In a blank Excel worksheet I'll type the values one, two, three, four in individual cells in a column. I'll then highlight these values. Switching back to R I'll create a variable called test one. In this variable I'll save these values using the XLGetRange function. Make sure to also type header=F remembering to capitalize F.
Now to test if the data is saved, I'll call the variable Test1. Voila, there we have it. Okay, so once R is running properly we need to set up Excel as well. I'm using Excel 2016, again, on Windows. Setup will be slightly different on the Mac. We'll be using something called Solver, which his an add-in. To add this to my data tab in the Excel ribbon, I need to do some manual configuration.
I'l go to the file menu, then to options, then click on the add-ins side tab. Then go next to the manage Excel add-ins option. Here I can choose the Solver add-in and press OK. Check the data tab and it should be there. All right, now we're ready to go.
- Assembling the forecast equation for a trended baseline
- Simple exponential smoothing with a stationary baseline
- Using R for simple exponential smoothing
- Optimizing the level and trend constants via Solver
- Using R to forecast a trended series