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 (a) of 0.30 and a starting forecast of 410.00, the following sales forecast has been developed: Year Sales 2005 2006 2007 2008 2009 450 495 518 563 580 Forecasted Sales 410.00 422.00 443.90 466.13 495.19 The MAD for a forecast developed using exponential smoothing with a = 0.30 is 73.76 sales (round your response to two decimal places). Forecasted sales for years 2006 through 2010 using exponential smoothing with a = 0.60 and a starting forecast of 410.00 are (round your responses to two decimal places): Year Forecasted Sales 2005 410.00 2006 0 2007 0 2008 0 2009 0 2010 0

Answer 1

FORECAST = F(T-1) + (ALPHA * (A(T-1) - F(T-1)), A = ACTUAL DEMAND, F = FORECAST, (T-1) = PREVIOUS PERIOD

FORECAST 2 = 410 + (0.6 * (450 - 410) = 434
FORECAST 3 = 434 + (0.6 * (495 - 434) = 470.6
FORECAST 4 = 470.6 + (0.6 * (518 - 470.6) = 499.04
FORECAST 5 = 499.04 + (0.6 * (563 - 499.04) = 537.42
FORECAST 6 = 537.42 + (0.6 * (580 - 537.42) = 562.97