A company wants to generate a forecast for unit demand for year 2009 using exponential smoothing.The actual demand in year 2008 was 120.The forecast demand in year 2008 was 110.Using this data and a smoothing constant alpha of 0.1,which of the following is the resulting year 2009 forecast value?
A)100
B)110
C)111
D)114
E)120

Question

Quizplus · Accepted Answer

The exponential smoothing formula is: Forecast for next period = Forecast for current period + α * (Actual demand for current period - Forecast for current period). Using the given data: 110 + 0.1 * (120 - 110) = 111.

A Company Wants to Generate a Forecast for Unit Demand