AN EXPONENTIALLY WEIGHTED MOVING AVERAGE METHOD WITH DESIGNED INPUT DATA ASSIGNMENTS FOR FORECASTING LIME PRICES IN THAILAND

Abstract

In this paper, the Exponentially Weighted Moving Average (EWMA) method with designed input data assignments (i.e. the proposed method) is presented to forecast lime prices in Thailand during January 2016 to December 2016. The lime prices from January 2011 to December 2015 as the input data are gathered from the website’s database of Simummuang market, which is one of the big markets in Thailand. The novelty of our paper is that although the performance of the EWMA method significantly decreases when applying to forecast data which show trend and seasonality behaviors and the EWMA method is used for short-range forecasting (i.e. usually one month into the future), the proposed method can properly handle such mentioned problems. For this purpose, to forecast lime prices, five different input data are intently defined before assigned to the EWMA method: a) the monthly data of the year 2015 (i.e. the recent year data), b) the average monthly data of the year 2011 to 2015, c) the median of the monthly data of the year 2011 to 2015, d) the monthly data of the year 2011 to 2015 after applying the linear weighting factor, where the higher weight value is applied to the recent data, and e) the average monthly data of the year 2011 to 2015 after applying the exponential weighting factor, where the higher weight is also applied to the recent data. These designed input data are used as agents of the raw data. Our study reveals that using the input data b) with the EWMA method to forecast lime prices during January 2016 to September 2016 gives the smallest forecasting error measured by the Mean Absolute Percentage Error (MAPE). Forecasted lime prices of October 2016 to December 2016 are also provided. Additionally, we demonstrate that the proposed method works well compared with the Double Exponentially Weighted Moving Average (DEWMA), the Multiplicative Holt-Winters (MHW), and the Additive Holt-Winters (AHW) methods, which are suitably used for forecasting data with the trend and the seasonality.