Exhibit 11.7
The following questions use the data below.
Joe's Sporting Goods wants to forecast quarterly sales figures using Holt's method. The store has collected 12 quarters of data and needs your help to analyze the data.
-Refer to Exhibit 11.7. What formula should be entered in cell E4 to compute the base level when using Holt's method?
A) =$J$3*D4+(1-$J$3)*(E3+F3)
B) =$J$4*D4+(1-$J$4)*(E3+F3)
C) =$J$3*G4+(1-$J$3)*(E3+F3)
D) =$J$4*(E4-E3)+(1-$J$4)*F3

Question

Exhibit 11.7
The following questions use the data below.
Joe's Sporting Goods wants to forecast quarterly sales figures using Holt's method. The store has collected 12 quarters of data and needs your help to analyze the data. 
-Refer to Exhibit 11.7. What formula should be entered in cell E4 to compute the base level when using Holt's method?
A) =$J$3*D4+(1-$J$3)*(E3+F3) 
B) =$J$4*D4+(1-$J$4)*(E3+F3) 
C) =$J$3*G4+(1-$J$3)*(E3+F3) 
D) =$J$4*(E4-E3)+(1-$J$4)*F3

Quizplus · Accepted Answer

The correct formula for computing the base level in Holt's method is: Level = α*(current observation) + (1-α)*(previous level + previous trend), where α is the smoothing constant for the level. In this context, $J$3 represents α, D4 represents the current observation, E3 represents the previous level, and F3 represents the previous trend. Therefore, option A correctly applies Holt's method formula.

Exhibit 11.7 The Following Questions Use the Data Below