Question

Using exponential smoothing with a smoothing constant equal to 0.15 and assuming a March forecast of 16(000), what is the forecast for the next period?

A) 18,400
B) 17,800
C) 16,200
D) 16,800

Answer 1

To forecast the next period using exponential smoothing with a smoothing constant of 0.15 and a March forecast of 16,000, the forecast for the next period is also 16,000.

Step-by-step explanation:

To forecast the next period using exponential smoothing with a smoothing constant of 0.15, we use the formula:

F_t = α * A_t + (1-α) * F_(t-1)

where F_t is the forecast for the next period, α is the smoothing constant, A_t is the actual value for the current period, and F_(t-1) is the forecast for the previous period.

Given a March forecast of 16,000 and a smoothing constant of 0.15, we can calculate the forecast as follows:

F_(t+1) = 0.15 * 16,000 + (1-0.15) * 16,000 = 2,400 + 13,600 = 16,000

Therefore, the forecast for the next period is 16,000.