A large Portland manufacturer wants to forecast demand for a piece of polltion-c
ID: 2552945 • Letter: A
Question
A large Portland manufacturer wants to forecast demand for a piece of polltion-control equipment. A review of past sales (AL as shown below indicates that an increasing trend is present Smoothing constants are assiged the values oa . 0 20 and ?-?4. The frm assumes the ritial forecast for month 1 (F1) was 1 3.00 units and the trend over that period Tt was 2.00 units. using trend so usted exponential smoothing. Forecasts f ? Trend(Tr and Forecasts Including Trend(R for months 1 through 4 have already been developed and are provided bekow Continue with the process and deterine Ft T, and FIT for months 5 and 6 fround yow responses to two decimalplaces Ineluding FIT) Month Actuel Demand (Fe) (Tp (Ae) 4.0 16.0 24.0 19.0 14.80 16.58 9.55 1.92 1.86 6.72 1844 21.85 230 300 28.0 36.0 10Explanation / Answer
Trend Adjusted Exponational Smoothing Formula (AF t+1) = F t+1 + T t+1
F t+1 = a x Dt + (1 - a) x Ft
a = 0.20
Dt = Actual of Previous month
Ft = Forecast including trend of Previous month
T t+1 = B x (F t+1 - Ft ) + ( 1 - B) Tt
B = .40
F t+1 = Forcast of Current Month
Ft = Forcast of Previous Month
Tt = Trend of Previous Month
For Month 2 Forcast = F t = a x Dt + (1 - a) x Ft
= (0.20 x 14) + (1 - 0.20) x 15
= 2.80 + 12
= 14.80
Trend = T t+1 = B x (F t+1 - Ft ) + ( 1 - B) Tt
= 0.40 (14.80 - 13) + (1 - 0.40) x 2
= 0.72 + 1.2 = 1.92
Trend for month 2 = 1.92
For Month 5 = F t = a x Dt + (1 - a) x Ft
= (0.20 x 19) + (1 - 0.20) x 21.85
= 3.8 + 17.48
Month 5 Forcast = 21.28
Trend = T t+1 = B x (F t+1 - Ft ) + ( 1 - B) Tt
= 0.40 (21.28 - 19.55) + (1 - 0.40) x 2.30
= 0.692 + 1.38 = 2.072
Month 5 Trend = 2.072
Forcast Including Trens For Month 5 = 21.28 + 2.072 = 23.35
For Month 6 = F t = a x Dt + (1 - a) x Ft
= (0.20 x 22) + (1 - 0.20) x 23.35
= 4.4 + 18.68
Month 6 Forcast = 23.08
Trend = T t+1 = B x (F t+1 - Ft ) + ( 1 - B) Tt
= 0.40 (23.08 - 21.28) + (1 - 0.40) x 2.07
= 0.72 + 1.24 = 1.96
Month 6 Trend = 1.96
Forcast Including Trens For Month 6 = 23.08 + 1.96 = 25.04
Month Actual Demand Forcast Trend Forcast including Trend 1 14 13.00 2.00 15.00 2 16 14.80 1.92 16.72 3 24 16.58 1.86 18.44 4 19 19.55 2.30 21.85 5 22 21.28 2.07 23.35 6 21 23.08 1.96 25.05 7 30 0 8 28 0 9 36 0Related Questions
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