Question

Given a prior forecast demand value of 62, a related actual demand value of 58, and an alpha of 0.3, what is the exponential smoothing forecast value for the following period? A. 59.4 B. 62.7 C. 61.3 D. 60.8 E. 63.2

Answer 1

Option D) 60.8

Explanation:

We are given the following information in the question:

Forecast demand value = 62

`F_(t-1) = 62`

Actual demand value = 58

`A_(t-1) = 58`

`\alpha = 0.3`

Formula:

`F_t = (1-\alpha)F_t + \alpha A_(t-1)`

Putting all the values, we get:

`F_t = (1-0.3)62 +0.3(58) = 60.8`

Option D) 60.8