The following table shows the sales data of a particular model of a DVD player. If the forecast sales for May is 36.25, calculate the sales forecast for July using the simple exponential smoothing (SES) model with a smoothing constant of 0.40.
$\begin{array} { | l | l | }
\hline \text { Month } & \text { Sales } \
\hline \text { Jan } & 35 \
\hline \text { Feb } & 29 \
\hline \text { Mar } & 39 \
\hline \text { Apr } & 42 \
\hline \text { May } & 51 \
\hline \text { Jun } & 56 \
\hline
\end{array}$
A) The sales forecast for July is more than 30 but less than or equal to 35.
B) The sales forecast for July is more than 35 but less than or equal to 40.
C) The sales forecast for July is more than 40 but less than or equal to 50.
D) The sales forecast for July is more than 50 but less than or equal to 55.

Question

The following table shows the sales data of a particular model of a DVD player. If the forecast sales for May is 36.25, calculate the sales forecast for July using the simple exponential smoothing (SES) model with a smoothing constant of 0.40. 
$\begin{array} { | l | l | } 
\hline \text { Month } & \text { Sales } \
\hline \text { Jan } & 35 \
\hline \text { Feb } & 29 \
\hline \text { Mar } & 39 \
\hline \text { Apr } & 42 \
\hline \text { May } & 51 \
\hline \text { Jun } & 56 \
\hline
\end{array}$
A) The sales forecast for July is more than 30 but less than or equal to 35.
B) The sales forecast for July is more than 35 but less than or equal to 40.
C) The sales forecast for July is more than 40 but less than or equal to 50.
D) The sales forecast for July is more than 50 but less than or equal to 55.

Quizplus · Accepted Answer

Using the SES model with a smoothing constant of 0.40, we can calculate the forecast for July as:
 
Ft+1 = α∗At + (1−α)∗Ft
 
where Ft+1 is the forecast for July, At is the actual sales in June, and Ft is the forecast for June.

Applying this formula, we get:

Ft+1 = 0.4∗56 + (1−0.4)∗51
Ft+1 = 0.4∗56 + 0.6∗51
Ft+1 = 22.4 + 30.6
Ft+1 = 53

Therefore, the sales forecast for July is more than 40 but less than or equal to 50, which is choice C.

The Following Table Shows the Sales Data of a Particular