The president of Northern University wants to forecast student enrolments for this academic year based on the following historical data: What is the forecast for this year using exponential smoothing with alpha = 0.5,if the forecast for two years ago was 16,000?

Question

The president of Northern University wants to forecast student enrolments for this academic year based on the following historical data:  What is the forecast for this year using exponential smoothing with alpha = 0.5,if the forecast for two years ago was 16,000?

Quizplus · Accepted Answer

Using exponential smoothing with alpha = 0.5, the forecast for this year can be calculated as:
F(t+1) = alpha * D(t) + (1-alpha) * F(t)
where F(t) is the forecast for the previous year and D(t) is the demand in the previous year. Given that the forecast for two years ago was 16,000, we can start with:
F(2015) = 16,000
And then calculate the forecast for 2016, 2017, and 2018 as follows:

F(2016) = 0.5 * 17,500 + 0.5 * 16,000 = 16,750
F(2017) = 0.5 * 21,000 + 0.5 * 16,750 = 18,875
F(2018) = 0.5 * 25,000 + 0.5 * 18,875 = 21,938

Therefore, the forecast for this year (2019) is approximately 19,500 (rounded to the nearest hundred).

The President of Northern University Wants to Forecast Student Enrolments