The president of State University wants to forecast student enrollments for this academic year based on the following historical data: $$\begin{array} { l l }
\text { Year } & \text { Enrollments } \
\hline \text { 5 years ago } & 15,000 \
4 \text { years ago } & 16,000 \
\text { 3 years ago } & 18,000 \
2 \text { years ago } & 20,000 \
\text { Last year } & 21,000
\end{array}$$ What is the forecast for this year using exponential smoothing with alpha = .5, if the forecast for two years ago was 16,000?
A) 18,750
B) 19,500
C) 21,000
D) 22,650
E) 22,800

Question

The president of State University wants to forecast student enrollments for this academic year based on the following historical data: $$\begin{array} { l l } 
\text { Year } & \text { Enrollments } \
\hline \text { 5 years ago } & 15,000 \
4 \text { years ago } & 16,000 \
\text { 3 years ago } & 18,000 \
2 \text { years ago } & 20,000 \
\text { Last year } & 21,000
\end{array}$$ What is the forecast for this year using exponential smoothing with alpha = .5, if the forecast for two years ago was 16,000?
A) 18,750
B) 19,500
C) 21,000
D) 22,650
E) 22,800

Quizplus · Accepted Answer

The exponential smoothing formula is: Forecast = Previous Forecast + α(Actual - Previous Forecast). Using the given data: Forecast for last year = 16,000 + 0.5(20,000 - 16,000) = 18,000. Forecast for this year = 18,000 + 0.5(21,000 - 18,000) = 19,500.

The President of State University Wants to Forecast Student Enrollments