Comparison of Exponential Smoothing Methods in Forecasting Palm Oil Real Production

Abstract

Palm oil has important role for the plantation subsector. Forecasting of the real palm oil production in certain period is needed by plantation companies to maintain their strategic management. This study compared several methods based on exponential smoothing (ES) technique such as single ES, double exponential smoothing holt, triple exponential smoothing, triple exponential smoothing additive and multiplicative to predict the palm oil production. We examined the accuracy of forecasting models of production data and analyzed the characteristics of the models. Programming language R was used with selected constants for double ES (α and β) and triple ES (α, β, and γ) evaluated by the technique of minimizing the root mean squared prediction error (RMSE). Our result showed that triple ES additives had lowest error rate compared to the other models with RMSE of 0.10 with a combination of parameters α = 0.6, β = 0.02, and γ = 0.02.