Use the data given below to answer the following question(s).
The table below shows the car sales from the year 2002-2007.The forecaster assumes a smoothing constant of 0.8 and uses the exponential smoothing model to determine the forecast for the future.
-From the data given above,what is the forecast-in 000s-for the year 2003?
A)41 units
B)33 units
C)66 units
D)49 units

Question

Use the data given below to answer the following question(s).
The table below shows the car sales from the year 2002-2007.The forecaster assumes a smoothing constant of 0.8 and uses the exponential smoothing model to determine the forecast for the future. 
-From the data given above,what is the forecast-in 000s-for the year 2003?
A)41 units 
B)33 units 
C)66 units 
D)49 units

Quizplus · Accepted Answer

The exponential smoothing forecast model is given by the formula:
Forecast for next period = (Smoothing constant x Actual value) + [(1 - Smoothing constant) x Forecast for previous period]
Using a smoothing constant of 0.8, the forecast for the year 2003 would be:
Forecast for 2003 = (0.8 x 55) + (0.2 x 50) = 44 + 10 = 54 (in thousands)
Therefore, the closest option to the forecast for the year 2003 is C) 66 units.

Use the Data Given Below to Answer the Following Question(s)