The forecast was 70 units for the current period while actual demand was 76.The forecast for the next period is 75.8.What is alpha if a simple exponential smoothing forecast method is being used?
A) 0.004 .
B) 0.967
C) 0.040
D) 0.097

Question

The forecast was 70 units for the current period while actual demand was 76.The forecast for the next period is 75.8.What is alpha if a simple exponential smoothing forecast method is being used?
A) 0.004 . 
B) 0.967
C) 0.040
D) 0.097

Quizplus · Accepted Answer

Ft+1 = Ft + alpha(Dt - Ft), therefore 75.8 = alpha(76 - 70). Solving for alpha = 0.967 (5.8/6.0 = 0.967).

The Forecast Was 70 Units for the Current Period While