The Zocor Company is interested in forecasting period 13 sales for a product.It has 12 months of historical data.The following shows the data and the forecasted values for periods 1-12 using a single exponential smoothing model with a smoothing constant value equal to 0.20. Which of the following would be the forecast for period 13?
A)40.3
B)39.2
C)34.7
D)36.5

Question

The Zocor Company is interested in forecasting period 13 sales for a product.It has 12 months of historical data.The following shows the data and the forecasted values for periods 1-12 using a single exponential smoothing model with a smoothing constant value equal to 0.20.  Which of the following would be the forecast for period 13?
A)40.3 
B)39.2 
C)34.7 
D)36.5

Quizplus · Accepted Answer

Looking at the forecasted values for periods 1-12, we can see that the forecasted value for period 12 is 38.4. To calculate the forecast for period 13 using single exponential smoothing and a smoothing constant of 0.20, we use the formula: Forecast for period t+1 = α(actual sales for period t) + (1-α)(forecast for period t). Plugging in the numbers, we get: Forecast for period 13 = 0.20(38.4) + 0.80(38.0) = 39.2. Therefore, the forecast for period 13 is 39.2, which is option B.

The Zocor Company Is Interested in Forecasting Period 13 Sales