Difference between Strategy 21(Holt) & Strategy 22( 2nd order exponential smoothing)

[Former Member]

Hi guys,

Difference between Strategy 21(Holt) & Strategy 22( 2nd order exponential smoothing) as listed in APO DP.

G(t1) = alpha * V(t1) + (1-alpha) G(t1-1)

G(t2)= alpha * G(t1) + (1-alpha) G(t2-1)

Along with assumption used in SAP to calculate 1st ex-post point in the past

[werner_mhansen · Accepted solution]

Hi Bhaskar,

You can find the explanation for each strategy and their differences in the below links:

First-order exponential smoothing (21): https://help.sap.com/saphelp_scm50/helpdata/en/ac/216b83337b11d398290000e8a49608/content.htm

Second-order exponential smoothing (22): https://help.sap.com/saphelp_scm50/helpdata/en/ac/216b86337b11d398290000e8a49608/content.htm

Also, please check the follow link for more details:
https://help.sap.com/saphelp_scm50/helpdata/en/ac/216b6e337b11d398290000e8a49608/content.htm

Best regards,
Werner Hansen

[Former Member · Accepted solution]

Please explain the formula below...

G(t)= alpha * V(t) + (1-alpha)* G(t-1)

while calculating G(t), why & how V(t) is involved into it. Please explain with example. No theoretical explanation required.

[IvanBukharev · Accepted solution]

I suggest SAP should provide new calculation examples in excel format for each planning strategy. Where every user interactively can try how it works.

All this "formulas" is outdated format, it was only suitable in the time of Gauss.