Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing?
A) 36.9
B) 57.5
C) 60.5
D) 62.5
E) 65.5

Question

Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing?
A) 36.9
B) 57.5
C) 60.5
D) 62.5
E) 65.5

Quizplus · Accepted Answer

The formula for simple exponential smoothing is:
Forecast for next period = Alpha * Actual demand for current period + (1 - Alpha) * Previous forecast
Using the given values, we can calculate the forecast as:
62.5 = 0.3 * 59 + (1 - 0.3) * 64

Given an Actual Demand of 59, a Previous Forecast of 64