Given an actual demand of 61, forecast of 58, and α of .3, what would the forecast for the next period be using simple exponential smoothing?
A) 57.1
B) 58.9
C) 61.0
D) 65.5

Question

Quizplus · Accepted Answer

The formula for simple exponential smoothing is:
Forecast for next period = α*(Actual demand for current period) + (1-α)*(Forecast for current period)
Using the given values:
Forecast for next period = 0.3*(61) + 0.7*(58) = 18.3 + 40.6 = 58.9
Therefore, the forecast for the next period using simple exponential smoothing is 58.9.

Given an Actual Demand of 61, Forecast of 58, and α