Question

If you are using exponential smoothing for forecasting an annual time series of revenues, what is your forecast for next year if the smoothed value for this year is $32.4 million

Answer 1

the forecast for next year is also $32.4 million

Step-by-step explanation:

Given that:

the smoothed value
`E_i` for this year is $32.4 million

Let assume that i should be the current year

So; i + 1 can now be the next year

Therefore:

`\mathbf{E_i = 32.4 million}`

However; as we know quite well that the smoothed value for the current time period is equally the same thing to the forecasted value of the following year time period.

We can therefore posits that, the forecasting for the next year will be:

`\mathbf{\hat Y _(i+1)=E_i}`

`\mathbf{\hat Y _(i+1)=32.4 \ million}`

Thus; the forecast for next year is also $32.4 million