Suppose that Sally's company uses exponential smoothing to make forecasts. Further suppose that last period's demand forecast was for 20,000 units and last period's actual demand was 21,000 units. Sally's company uses a smoothing constant (?) equal to 40%. What should be the forecast for this period?
A) 20,000
B) 21,000
C) 20,600
D) 20,400
E) 19,600

Question

Quizplus · Accepted Answer

.4(21,000) + (1- .4)20,000 = 8400 + (.6 x 20,000) = 8400 + 12,000 = 20,400 11ea8e10_ac21_f975_8f12_d1b15e3664ab_TB5472_00

Suppose That Sally's Company Uses Exponential Smoothing to Make Forecasts