Using exponential smoothing, if F_t = 220, y_t = 240, and α = .20, what is the new forecast F_t₊₁? A)217 B)224 C)232 D)243

Question

Quizplus · Accepted Answer

Using exponential smoothing formula: Ft+1 = α * yt + (1- α) * Ft where Ft is the forecast for the current period, yt is the actual value for the current period, α is the smoothing factor. Given: Ft=220 yt=240 α=0.20 Substituting the values in the formula: Ft+1= 0.20 * 240 + (1-0.20) * 220 Ft+1= 48 + 0.80 * 220 Ft+1= 48 + 176 Ft+1= 224 Therefore, the new forecast F_t₊₁ is 224. Hence, the answer is B.

Using Exponential Smoothing, If Ft = 220, Yt = 240

Using Exponential Smoothing, If F_t = 220, Y_t = 240