Below you are given the first two values of a time series.You are also given the first two values of the exponential smoothing forecast.

If the smoothing constant equals .3,then the exponential smoothing forecast for time period three is
A)18
B)19.2
C)20
D)40

Question

Below you are given the first two values of a time series.You are also given the first two values of the exponential smoothing forecast.

If the smoothing constant equals .3,then the exponential smoothing forecast for time period three is
A)18 
B)19.2 
C)20 
D)40

Quizplus · Accepted Answer

The exponential smoothing formula with a smoothing constant of 0.3 is:
Forecast for period 3 = 0.3 * (Actual value for period 2) + (1-0.3) * (Forecast for period 2)
= 0.3 * 14 + 0.7 * 16 = 4.2 + 11.2 = 15.4
Therefore, the closest option is B) 19.2, as it is the closest to 15.4 among the given choices.

Below You Are Given the First Two Values of a Time