Question

The following table shows the actual demand observed over the last 11 years Year 10 11 Demand 7 4 Using exponential smoothing with α = 0.30 and a forecast for year 1 of 6.0, provide the forecast from periods 2 through 12 round your responses place) one decimal Year 2 4 10 12 Forecast 6.0

Answer 1

Calculation of Forecast Using exponential smoothing for the period 2 to 12

Under exponential smoothing, the forecast for next period =

Forecast for previous period (F_t-1)+ Alpha (α) x {Actual of previous period (A_t-1) – Forecast of previous period(F_t-1)}

F_t = F_t-1 + α(A_t-1 - F_t-1)

All Forecast Values Round to 1 decimal

Year	Demand (A)	Forecast (F)	Calculations (Only for Explanation
1	7	6
2	9	6.3	6 + .30(7- 6) = 6.30
3	4	7.1	6.3 + .30(9 - 6.3) = 7.11
4	7	6.2	7.1 + .30(4 - 7.1) = 6.17
5	13	6.4	6.2 + .30(7 - 6.2) = 6.44
6	7	8.4	6.4 + .30(13 - 6.4) = 8.38
7	11	8.0	8.4 + .30(7 - 8.4) = 7.98
8	14	8.9	8.0 + .30(11 - 8.0) = 8.9
9	9	10.4	8.9 + .30(14 - 8.9) = 10.43
10	11	10.0	10.4 + .30(9 - 10.4) = 9.98
11	7	10.3	10.0 + .30(11-10) = 10.30
12		9.3	10.3 + .30(7-10.30) = 9.31