Assume that the forecast for the last period is FIT_t = 200 units,and recent experience suggests a likely sales increase of 10 units each period.Actual sales for the last period reached 230 units.Assume a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10.What is the ADJUSTED forecast for the next period? A)210.0 B)210.6 C)216.6 D)216.0

Question

Quizplus · Accepted Answer

Step 1: Compute the trend factor for the last period using the formula:
Trend factor (B1) = β * [S1U1 - S1U1B1]
B1 = 0.10 * [230 - 200] = 3

Step 2: Compute the new sales forecast for the next period using the formula:
Ft+1 = α * St + (1- α) * [St + B1]
Ft+1 = 0.20 * 230 + (1-0.20) * [230 + 3] = 216.6

Therefore, the adjusted forecast for the next period is 216.6. The correct answer is C.

Assume That the Forecast for the Last Period Is FITt

Assume That the Forecast for the Last Period Is FIT_t