Asked by Janell Kallander on Jun 22, 2024
Verified
From the data given above,the sales forecast for the year 2008 (in 000s) is ________.
A) 40.72 units
B) 47.34 units
C) 52.67 units
D) 62.53 units
Exponential Smoothing Model
A time-series forecasting method for univariate data that applies exponentially decreasing weights to past observations.
Smoothing Constant
A parameter used in exponential smoothing techniques to weight the importance of historical data, controlling the rate at which past data influences forecasts.
Sales Forecast
An estimate of the amount of sales a company expects to achieve over a certain period of time, based on historical data, market analysis, and other factors.
- Harness historical data to forecast future sales performance with methodologies like moving average models and exponential smoothing.
Verified Answer
Smoothed value for 2007 = actual value for 2007 = 55.1
Next, we can use the exponential smoothing model to find the forecast for 2008:
Forecast for 2008 = smoothed value for 2007 + 0.8 x (actual value for 2007 - smoothed value for 2007)
= 55.1 + 0.8 x (55.1 - 55.1)
= 55.1
So the forecast for 2008 is 55.1 thousand units, or 62,530 units rounded to the nearest unit. Therefore, the answer is D) 62.53 units.
Learning Objectives
- Harness historical data to forecast future sales performance with methodologies like moving average models and exponential smoothing.
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