Question

Given an actual demand of 63 a previous forecast of 58 and an alpha of .3 what would the forecast for the next period be using simple exponential smoothing ?

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Answer 1

The forecast for the next period based on simple exponential smoothing is 59.50

Step-by-step explanation:

In determining the forecast for the period using the exponential smoothing approach, the below formula is of utmost importance:

forecast=(α*prior period actual)+(1-α)*prior period forecast

α =alpha=smoothing constant =.3

prior period actual=63

prior period forecast=58

forecast for the next period=(.3*63)+(1-.3)*58

forecast for the next period=18.90+40.60

forecast for the next period=59.50