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• Smoothed average S
t
= αX
t
+ (1 - α)S
t
- 1
• Change, C
t
= S
t
- S
t
- 1
• Trend, T
t
= αC
t
+ (1 - α)T
t
- 1
•
Current period expected usage,
•
Forecast of next period expected usage,
• Error, e
t
= t - X
t
•
Cumulative error =
•
Initial conditions: S
t-1
= X
t-1
T
t-1
= 0
Pricing Calculations
Markup and Margin Calculations
• Ma = margin(%).
• Mu = markup(%).
• S = selling price.
• C = cost.
S
3
Iny
i
ncb
2n 1+
aln()+ln=
i2n1+=
3n
∑
=
b
n
1–
b1–
---------------
e
t
2
t1
=
∑