Exhibit 11.3
The following questions use the data below.
Honest Al's Used Cars wants to predict how many cars are sold each month. He has collected data for 12 months. He needs your help in analyzing this data using exponential smoothing.
-Refer to Exhibit 11.3. What formula should be entered in cell C4 to compute the exponential smoothing forecast for month 2?
A) =C3-$F$3*(B3-C3)
B) =C3+$F$3*(C3-B3)
C) =B3+$F$3*(B3-C3)
D) =C3+$F$3*(B3-C3)

Question

Exhibit 11.3
The following questions use the data below.
Honest Al's Used Cars wants to predict how many cars are sold each month. He has collected data for 12 months. He needs your help in analyzing this data using exponential smoothing. 
-Refer to Exhibit 11.3. What formula should be entered in cell C4 to compute the exponential smoothing forecast for month 2?
A) =C3-$F$3*(B3-C3) 
B) =C3+$F$3*(C3-B3) 
C) =B3+$F$3*(B3-C3) 
D) =C3+$F$3*(B3-C3)

Quizplus · Accepted Answer

The formula for exponential smoothing is Ft+1 = Ft + alpha (At - Ft), where Ft+1 is the forecast for the next period, Ft is the forecast for the current period, alpha is the smoothing constant, and At is the actual value for the current period. The formula in cell C4 should therefore be =C3+$F$3*(B3-C3), because this formula uses the forecast for month 1 (C3) and the actual value for month 2 (B3) to calculate the forecast for month 2 (C4).

Exhibit 11.3 The Following Questions Use the Data Below