Homework SourseWhat is the exponentially smoothed forecast for January give
What is the exponentially smoothed forecast for January given an alpha of 0.5
Month Sales
January 9.00
Feb 7.00
March 10.00
April 8.00
May 7.00
June 12.00
July 10.00
August 11.00
September 12.00
October 10.00
November 14.00
December 16.00
January ---
Answer possibilites are 12.33, 14.17, 13.33, and 12.60
Solution
As per formula for single exponential smoothing forecast :
Ft = alpha x At-1 + alpha x Ft-1
= 0.5 x At-1 + 0.5 x Ft-1
Where,
At-1 = Sales- actual for period t-1
Ft-1 = Sales – Forecast for period t-1
Ft = Sales- forecast for period t
Alpha = Exponential smoothing forecast = 0.5
We also assume value of sales – forecast for January = 9
Using the value of Forecast-Sales for January = 9 and using above formula for exponential smoothing forecast , the values of Sales- Forecast for each month are presented in below table .
Accordingly value of Forecast – Sales for period January works out to be 14.15 which is nearest to value of 14.17 in multiple choice options
Month
Sales- Actual
Sales - Forecast
January
9
9.00
February
7
9.00
March
10
8.00
April
8
9.00
May
7
8.50
June
12
7.75
July
10
9.88
August
11
9.94
September
12
10.47
October
10
11.23
November
14
10.62
December
16
12.31
January
14.15
ANSWER : FORECAST FOR JANUARY IS 14.17
| Month | Sales- Actual | Sales - Forecast |
| January | 9 | 9.00 |
| February | 7 | 9.00 |
| March | 10 | 8.00 |
| April | 8 | 9.00 |
| May | 7 | 8.50 |
| June | 12 | 7.75 |
| July | 10 | 9.88 |
| August | 11 | 9.94 |
| September | 12 | 10.47 |
| October | 10 | 11.23 |
| November | 14 | 10.62 |
| December | 16 | 12.31 |
| January | 14.15 |
