Question

The following table shows the actual demand observed over the last 11 years:

Year: 1 2 3 4 5 6 7 8 9 10 11
Demand: 7 8 5 7 12 7 13 12 8 11 8
Using exponential smoothing with α = 0.30 and a forecast for year 1 of 6.0, provide the forecast from periods 2 through 12 (round yor responses to one decimal place).
Year: 1 2 3 4 5 6 7 8 9 10 11
Demand: 6.0 __ __ __ __ __ __ __ __ __ __

Answer 1

To forecast the demand using exponential smoothing with a given alpha value, we can use the formula: Forecast for period t = α(actual demand in period t) + (1-α)(forecast for period t-1).

Step-by-step explanation:

To forecast the demand using exponential smoothing, we can use the formula: Forecast for period t = α(actual demand in period t) + (1-α)(forecast for period t-1). Given that α = 0.30 and the forecast for year 1 is 6.0, we can calculate the forecast for each period as follows:

1. Forecast for period 1: 6.0
2. Forecast for period 2: 0.30(7) + (1-0.30)(6.0) = 6.3
3. Forecast for period 3: 0.30(8) + (1-0.30)(6.3) = 6.6
4. Forecast for period 4: 0.30(5) + (1-0.30)(6.6) = 6.3
5. Forecast for period 5: 0.30(7) + (1-0.30)(6.3) = 6.6
6. Forecast for period 6: 0.30(12) + (1-0.30)(6.6) = 8.3
7. Forecast for period 7: 0.30(7) + (1-0.30)(8.3) = 7.5
8. Forecast for period 8: 0.30(13) + (1-0.30)(7.5) = 9.3
9. Forecast for period 9: 0.30(12) + (1-0.30)(9.3) = 10.1
10. Forecast for period 10: 0.30(8) + (1-0.30)(10.1) = 9.3
11. Forecast for period 11: 0.30(11) + (1-0.30)(9.3) = 9.8