As a consultant, you have been asked to generate a unit demand forecast for a product for year 2018 using exponential smoothing. You have data for the past three years and the forecast and the actual are the same for the first period of your data (3 years ago). Which of the following is most accurate?
A. Forecast for year 2018 will be higher than the actual for 2017, if your α is close to 1.0
B. Forecast for 2018 will be between all the actual sales
C. Exponential smoothing is a type of weighted average forecasting method
A) Choice A
B) Choice B
C) Choice C
D) Choice B and C only
E) None of the above

Question

As a consultant, you have been asked to generate a unit demand forecast for a product for year 2018 using exponential smoothing. You have data for the past three years and the forecast and the actual are the same for the first period of your data (3 years ago). Which of the following is most accurate? 
A. Forecast for year 2018 will be higher than the actual for 2017, if your α is close to 1.0
B. Forecast for 2018 will be between all the actual sales
C. Exponential smoothing is a type of weighted average forecasting method
A) Choice A
B) Choice B
C) Choice C
D) Choice B and C only
E) None of the above

Quizplus · Accepted Answer

Exponential smoothing is a weighted average method (Choice C), and the forecast for 2018 will be influenced by past actual sales, making it likely to fall between them (Choice B).

As a Consultant, You Have Been Asked to Generate a Unit