Question

Exercise # 1-0M6322-week 4-Forecasting using Exponential Smoothing The first five periods of demand data are shown in the following table Let the smoothing coefficient, alpha, equal 0.2.Compute the exponentially smoothed forecasts for periods one through four Initialize the procedure with a forecast value for period one of 37 Period Aggregate Demand Forecast demand 38 42 40 36 42 37 Determine the Running Sum of Forecast Errors (RSFE), the Mean Absolute Deviation, MADt Land the Tracking Signal(TS) at the end of each period. Let the initial MAD 1 for period O be equal to 2. 3 5 6 0

Answer 1

Forecasted demand for t^th period, t_​​​​​​​​

F_t=F_t-1+$\alpha$(D_t-1-F_t-1)

Period	aggregate demand Dt	forecast demand Ft	forecast error	MAD	RSFE$\sum (D{_{}}{t}-Ft)$	T.S.=$\sum (D{_{}}{t}-Ft)/MAD$
1	38	37	1	1	1	1
2	42	37+.2×(38-37)=37.2	4.8	2.9	5.8	2
3	40	37.2+.2(42-37.2)=38.16	1.84	2.54	7.64	3.007
4	36	38.16+.2(40-38.16)=38.53	-2.53	2.543	5.11	2.009
5	42	38.53+.2(36-38.53)=38.02	3.98	2.83	9.09	3.21