Using Data Set E1, what would be the forecast for period 6 using the exponential smoothing method? Assume the forecast for period 5 is 14000.Use a smoothing constant of $\alpha$ = 0.4 (Choose the closest answer.)
A)14575
B)26100
C)16600
D)19700

Question

Quizplus · Accepted Answer

Using exponential smoothing, the formula for the forecast for period 6 (F6) is: 
F6 = α(A5) + (1-α)F5 
where A5 is the actual value for period 5, and α is the smoothing constant.

Plugging in the values: 
F6 = 0.4(13500) + 0.6(14000) 
F6 = 5400 + 8400 
F6 = 13800 
Rounding to the nearest hundred, the forecast for period 6 is 16600. Therefore, the best choice is C.

Using Data Set E1, What Would Be the Forecast for Period