Question

Question 8 You just opened a new bar in Whyte Ave. and you have seen an increase in the demand for your weekend special drink 3 points Save Answ You want to use the trend-adjusted exponential smoothing to make forecasts for the following week to capitalize on the success of your special drink and want to be prepare so you don't sold out before satisfying as much demand as possible. The following data has been collected to prepare your forecast A+ -1 = 123 drinks Tt-1 = 24 drinks q=0.5 b= 0.1 If the demand for your special drink was 152 (Dt = 152). What is the forecast for week next week (i.e., t + 1)? (Write your answer using ONE decimal place).

Answer 1

Question: You just opened a new bar in Whyte Ave. and you have seen an increase in the demand for your weekend special drink

Answer: 173.8

Explanation:

Given that:

Trend-adjusted exponential smoothing forecast is to be used.

At-1 = 123

Tt-1 = 24

$\alpha$ = 0.5

$\beta$ = 0.1

Dt = 152

Now:

To find Trend-adjusted exponential smoothing first let us find Exponential Smoothing

At+1 = $\alpha$ x Dt + (1 - $\alpha$ ) x (At-1 + Tt-1)

Therefore:

At+1 = 0.5 x 152 + (1 - 0.5) x (123 + 24)

At+1 = 149.5

Now, Trend is given by:

Tt+1 = $\beta$ x (At+1 - At-1) + (1 - $\beta$ ) x Tt-1

Therefore:

Tt+1 = 0.1 x (149.5 - 123) + (1 - 0.1) x 24

Tt+1 = 24.25

Now:

Trend adjusted exponential smoothing is given by:

FITt = At+1 + Tt+1

Therefore:

FITt = 149.5 + 24.25

FITt = 173.75

FITt = 173.8