A company wants to generate a forecast for unit demand for year 2012 using exponential smoothing.The actual demand in year 2011 was 120.The forecast demand in year 2011 was 110.Using this data and a smoothing constant alpha of 0.1, which of the following is the resulting year 2012 forecast value?
A)100
B)110
C)111
D)114
E)120

Question

Quizplus · Accepted Answer

The formula for exponential smoothing is: Forecast_new = Forecast_old + α * (Actual_old - Forecast_old). Using the given values: 110 + 0.1 * (120 - 110) = 111.

A Company Wants to Generate a Forecast for Unit Demand