Question

Hugo Enterprises (HE) is a small oil services firm in the Houston area. For the upcoming...

Hugo Enterprises (HE) is a small oil services firm in the Houston area. For the upcoming production period, Hugo must forecast demand for X200. Historical demand is given in the table below. Use exponential smoothing with alpha = 0.7 to forecast period 4. (Round all calculations to two decimal places)

Period

Demand

1

500

2

536

3

600

Forecast for Period 4 =                    Units

0 0
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Answer #1

F(t) = F(t-1) + (Alpha * (A(t-1) - F(t-1)))

FORECAST 2 = 500 + (0.7 * (500 - 500)) = 500

FORECAST 3 = 500 + (0.7 * (536 - 500)) = 525.2

FORECAST 4 = 525.2 + (0.7 * (600 - 525.2)) = 577.56

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