Exhibit 11.7
The following questions use the data below.
Joe's Sporting Goods wants to forecast quarterly sales figures using Holt's method. The store has collected 12 quarters of data and needs your help to analyze the data.
-Refer to Exhibit 11.7. What formula should be entered in cell F4 to compute the trend when using Holt's method?
A) =$J$3*D4+(1-$J$3)*(E3+F3)
B) =$J$4*(E4-E3)+(1-$J$4)*F3
C) =$J$4*(E4-E3)+(1-$J$4)*G3
D) =$J$4*G3+(1-$J$4)*(D3+G3)

Question

Exhibit 11.7
The following questions use the data below.
Joe's Sporting Goods wants to forecast quarterly sales figures using Holt's method. The store has collected 12 quarters of data and needs your help to analyze the data. 
-Refer to Exhibit 11.7. What formula should be entered in cell F4 to compute the trend when using Holt's method?
A) =$J$3*D4+(1-$J$3)*(E3+F3) 
B) =$J$4*(E4-E3)+(1-$J$4)*F3 
C) =$J$4*(E4-E3)+(1-$J$4)*G3 
D) =$J$4*G3+(1-$J$4)*(D3+G3)

Quizplus · Accepted Answer

Cell F4 is where we need to compute the trend value for the first forecast period. To compute the trend, we use Holt's method, which involves the following formula:
Trend (level change) = Holt's α-smoothed estimate of trend (in previous period) + Holt's β-smoothed estimate of error (in previous period)
From the given options, formula in choice B matches this requirement and should be used to compute the trend value.

Exhibit 11.7 The Following Questions Use the Data Below