Given an actual demand of 61, a previous forecast of 58, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing?
A) 45.5
B) 57.1
C) 58.9
D) 61.0
E) 65.5

Question

Quizplus · Accepted Answer

Using simple exponential smoothing, the forecast for the next period can be calculated as follows:

Forecast for next period = (1 - alpha) x previous forecast + alpha x actual demand 
= (1 - 0.3) x 58 + 0.3 x 61 
= 58.9

Therefore, the answer is C) 58.9.

Given an Actual Demand of 61, a Previous Forecast of 58