DETERMINING A FORECAST VIA EXPONENTIAL SM00THING In January, a car dealer predic
ID: 3175855 • Letter: D
Question
DETERMINING A FORECAST VIA EXPONENTIAL SM00THING In January, a car dealer predicted February demand for l42 Ford Mustangs. Actual February demand was 153 autos. Using a smoothing constant chosen by management of a 20, the dealer wants to fore- cast March demand using the exponential smoothing model APPROACH The exponential smoothing model in Equations (4-3 and (4-4) can be applied SOLUTION Substituting the sample data into the formula, we obtain New forecast (for March demand 142 .20153 142) 142 2.2 144.2 Thus, the March demand forecast for Ford Mustangs is rounded to 144 INSIGHT Using just two pieces of data, the forecast and the actual demand, plus a smoothing con stant, we developed a forecast of l44 Ford Mustangs for March. LEARNING EXERCISE If the smoothing constant is changed to .30, what is the new forecast? Answer: 145.31Explanation / Answer
take constant value in the first column
substract the alpha value from 1 and multipy with alpha u will get second column
simillary in the remain columns but take the differene of 1 and alphs and square and multiply with corresponding alpha
in the third colum u take cube for this u use (1-alph)^3. and multiply with corresponding alpha value
continure the procedure for lasr colum the the power will change
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