New Approach of Building GM(1,1) Background Value and Its Application

Abstract

In this paper, a new method of constructing GM(1,1)'s background value is put forward based on exponential function. Moreover, the difference between ameliorating GM(1,1) model and traditional GM(1,1) model is discussed in the prediction precision and the applicable range. Analysis shows that the prediction precision and the applicable range of the ameliorating GM(1,1) model has by far better than the traditional GM(1,1). The grey model against Shanghai city industry power consumption is set up by using the methods proposed in this paper. The modeling results show the effectiveness of the proposed approach.