Using the sales data on a particular model of a DVD player shown below in Table 4, answer question
Table 4
$\begin{array}{|l|c|}
\hline \text { Month } & \text { Sales } \
\hline \text { Jan } & 35 \
\hline \text { Feb } & 29 \
\hline \text { Mar } & 39 \
\hline \text { Apr } & 42 \
\hline \text { May } & 51 \
\hline \text { Jun } & 56 \
\hline
\end{array}$
-The sales forecast for July using the data in Table 4, forecasts sales for May as 36.25, and a simple exponential smoothing model with a smoothing constant of 0.40 is:
A) less than or equal to 35.
B) more than 35 but less than or equal to 40.
C) more than 40 but less than or equal to 50.
D) more than 50 but less than or equal to 55.

Question

Using the sales data on a particular model of a DVD player shown below in Table 4, answer question 
Table 4
 $\begin{array}{|l|c|}
\hline \text { Month } & \text { Sales } \
\hline \text { Jan } & 35 \
\hline \text { Feb } & 29 \
\hline \text { Mar } & 39 \
\hline \text { Apr } & 42 \
\hline \text { May } & 51 \
\hline \text { Jun } & 56 \
\hline
\end{array}$
-The sales forecast for July using the data in Table 4, forecasts sales for May as 36.25, and a simple exponential smoothing model with a smoothing constant of 0.40 is:
A) less than or equal to 35.
B) more than 35 but less than or equal to 40.
C) more than 40 but less than or equal to 50.
D) more than 50 but less than or equal to 55.

Quizplus · Accepted Answer

The forecast for July using a simple exponential smoothing model can be calculated using the formula: $F_{t+1} = \alpha \cdot A_t + (1 - \alpha) \cdot F_t$, where $F_{t+1}$ is the forecast for the next period, $\alpha$ is the smoothing constant (0.40 in this case), $A_t$ is the actual sales in the current period (56 for June), and $F_t$ is the forecast for the current period (36.25 for May). Plugging in the values: $F_{July} = 0.40 \cdot 56 + 0.60 \cdot 36.25 = 22.4 + 21.75 = 44.15$. This value is more than 40 but less than or equal to 50.

Using the Sales Data on a Particular Model of a DVD