What is the forecast for this year using trend adjusted (double)smoothing with alpha(1)= 0.3 and alpha(2)= 0.2,if the forecast for last year was 31,the forecast for two years ago was 43,and the trend estimate for last year's forecast was -15?
A) 16.6
B) 180
C) 300
D) 400
E) 510

Question

Quizplus · Accepted Answer

Using trend adjusted (double) smoothing with alpha(1)= 0.3 and alpha(2)= 0.2, the forecast for this year can be calculated as:
Forecast = Double smoothing forecast for last year + Trend estimate for last year
       = (0.3 x Actual last year's demand) + (1-0.3) x (Double smoothing forecast for last year + 0.2 x Trend estimate for last year)
       = (0.3 x 31) + (0.7 x (31+0.2(-15)))
       = 16.6
Hence, the answer is A) 16.6.

What Is the Forecast for This Year Using Trend Adjusted