Sales of Volkswagen\'s popular Beetle have grown steadily at auto dealerships in

Question

Sales of Volkswagen's popular Beetle have grown steadily at auto dealerships in Nevada during the past 5 years (see table below). Using exponential smoothing with a smoothing constant (alpha) of 0.30 and a starting forecast of 415.00, the following sales forecast has been developed: The MAD for a forecast developed using exponential smoothing with alpha = 0.30 is 72.22 sales (round your response to two decimal places). Forecasted sales for years 2006 through 2010 using exponential smoothing with alpha = 0.60 and a starting forecast of 415.00 are (round your responses to two decimal places):

Explanation / Answer

Exponential Smoothing = 0.3 Ft = Dt-1 + (1-)Ft-1 MAD 72.22 et = Dt -Ft MAD = |et|/n Period Demand Forecast Error Abs Error t Dt Ft et |et| 2005 455 415.00 40.0 40.0 2006 495 427.00 68.0 68.0 2007 518 447.40 70.6 70.6 2008 563 468.58 94.4 94.4 2009 585 496.91 88.1 88.1 2010 523.33 361.1 361.1 Exponential Smoothing = 0.6 Ft = Dt-1 + (1-)Ft-1 MAD 50.36 et = Dt -Ft MAD = |et|/n Period Demand Forecast Error Abs Error t Dt Ft et |et| 2005 455 415.00 40.0 40.0 2006 495 439.00 56.0 56.0 2007 518 472.60 45.4 45.4 2008 563 499.84 63.2 63.2 2009 585 537.74 47.3 47.3 2010 566.09 251.8 251.8

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