The forecast level of sales for the month of May was 240 units. Actual sales in May turned out to be 200 units. Use an exponential smoothing coefficient of 0.80 to forecast sales for June.
A) 230
B) 220
C) 210
D) None of the above is correct.

Question

Quizplus · Accepted Answer

The forecast for June using exponential smoothing is calculated as follows: Forecast for June = (Exponential Smoothing Coefficient * Actual Sales in May) + ((1 - Exponential Smoothing Coefficient) * Forecasted Sales for May). Plugging in the numbers: Forecast for June = (0.80 * 200) + ((1 - 0.80) * 240) = 160 + 48 = 208. Since none of the provided options match this calculation, the correct answer is D) None of the above is correct.

The Forecast Level of Sales for the Month of May