Furniture firm has decided to use exponential smoothing to forecast the next period's sales. If the forecasted sales for this period were 15,000, the actual sales of this period were 13,000 and the optimal weight was estimated to be 0.5, what are the projected sales of the next period?
A) 6,500
B) 7,500
C) 13,500
D) 14,000

Question

Quizplus · Accepted Answer

The projected sales for the next period using exponential smoothing are calculated with the formula: Forecast for next period = (Alpha * Actual sales this period) + ((1 - Alpha) * Forecasted sales this period). Plugging in the values: (0.5 * 13,000) + (0.5 * 15,000) = 6,500 + 7,500 = 14,000.

Furniture Firm Has Decided to Use Exponential Smoothing to Forecast