Year | Demand | 3 SMA | exponential smoothing with alpha = 0.4 |
5 years ago | 900 | - | - |
4 years ago | 700 | - | - |
3 years ago | 600 | - | - |
2 years ago | 500 | 733.3333 | 750 |
Last year | 300 | 600 | 650 |
this year | 466.6667 | 510 |
3 year simple moving average:
Forecast for this year = (Demand 3 years ago + Demand 2 years ago + Demand last year)/3 = (600+500+300)/3 = 466.6667 rounded to 467.
Simple exponential smoothing:
Ft+1 = Forecast this year
Dt = Demand last year
Ft = Forecast last year
Given, forecast for two years ago = 750
Forecast for last year = 0.4*500+0.6*750 = 650
Forecast for this year = 0.4*300+0.6*650 = 510
Answers:
Q12: Simple moving average = 467
Simple Exponential Smoothing = 510
Q14: Same as the simple exponential smoothing = 510
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