Question

A car dealer predicted January demand for 550 Chevrolet Spin Diesel cars. Actual demand was 680 cars and alpha= 0.10. Forecast the demand for February, using exponential smoothing model.

Answer 1

Step-by-step explanation:To forecast the demand for February using the exponential smoothing model, we can use the formula:

Forecast for February = (1 - α) × Actual demand for January + α × Forecast for January

Where:

- α is the smoothing constant, which determines the weight given to the previous forecast. In this case, α is given as 0.10.

- Actual demand for January is 680 cars.

- Forecast for January is 550 cars, as predicted by the car dealer.

Plugging in the values, we get:

Forecast for February = (1 - 0.10) × 680 + 0.10 × 550

Simplifying the equation, we have:

Forecast for February = 0.90 × 680 + 0.10 × 550

Forecast for February = 612 + 55

Forecast for February = 667

Therefore, the forecasted demand for February using the exponential smoothing model is 667 Chevrolet Spin Diesel cars.