Question

The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the anticipated mileage to be driven next year. The miles driven during the past 5 years are as​ follows:

                                                                                                                 

Year	1	2	3	4	5
Mileage	3,100	4,000	3,500	3,800	3,700

​d) Using exponential smoothing with alpha α ​=0.50 and the forecast for year 1 being 3,100​, the forecast for year 6​ =___miles ​(round your response to the nearest whole​ number).

Answer 1

​d) Using exponential smoothing with alpha α ​=0.50 and the forecast for year 1 being 3,100​, the forecast for year 6​= 3681

Explanation:

Period	Actual, At	Ft, Exponential Forecast
1	3100	3100.00
2	4000	3100.00
3	3500	3550.00
4	3800	3525.00
5	3700	3662.50
		3681.25

• the formula to be used in Simple Exponential smoothing is

F_t+1= alpha*A_t + (1-alpha) F_t

A_t means Actual demand of t'th period, if you want to find out the Forecast through exponential smoothing= forecast of 3rd period = alpha*actual demand of 2nd period +(1-alpha) *forecast demand of 2nd period

• remember forecast of 1st period is 3100, alpha= 0.5

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