Smoothing up to the end of the series
A major problem with the use of moving averages and similar smoothing methods is that they cannot be used up to the end of a time series. Exponential smoothing smooths only with previous values so it can even be used for the final value in the series.
Forecasting future values
The final exponentially smoothed value in the series can be used to forecast future values. If data are available up to and including time i, then the forecast for the next time period (i + 1) is the exponentially smoothed value at time i.
The same value is also used to forcast values further into the future.
Since the exponentially smoothed values depend on the smoothing constant, so do the forecasts.
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Time series with trend
The above example had no long-term trend. However for a time series with an increasing trend, exponential smoothing of the raw data will tend to underestimate the trend. Similarly, the smoothed series will be too high if there is a decreasing trend.
Do not use exponential smoothing on a time series with trend.
World rice production (million tonnes)