The forecast value for September was 10.6 and the actual value turned out to be 7.Using exponential smoothing with $\alpha$= 0.20, the forecast value for October would be ___.
A)10.10
B)9.88
C)12.00
D)10.6
E)8.88

Question

Quizplus · Accepted Answer

Exponential smoothing formula is:
Ft+1 = αAt + (1-α)Ft
where,
Ft+1 = Forecast for the next period
At = Actual value of the current period
Ft = Forecast of the current period
α = Smoothing constant (0≤α≤1)
Given,
F1 = 10.6 (First forecast)
A1 = 7 (Actual value for September)
α = 0.2
Forecast for October (F2) can be calculated as:
F2 =  α A1 + (1-α) F1
= 0.2(7) + (1-0.2)(10.6)
= 1.4 + 8.48
= 9.88
Therefore, the forecast value for October would be 9.88.

The Forecast Value for September Was 10 α\alphaα = 020, the Forecast Value for October Would Be ___

The Forecast Value for September Was 10 $\alpha$ = 020, the Forecast Value for October Would Be ___