Asked by Michael Clifford on Jul 02, 2024
Verified
From the data given above,what is the forecast-in 000s-for the year 2003?
A) 41 units
B) 33 units
C) 66 units
D) 49 units
Smoothing Constant
A factor used in exponential smoothing methods for forecasting, affecting the weight given to historical data.
Forecast
The process of making predictions about future events or trends based on past and current data analyses.
- Leverage previous data to estimate upcoming sales using approaches such as moving average models and exponential smoothing.
Verified Answer
JS
johnston silbanuz4 days ago
Final Answer :
C
Explanation :
The exponential smoothing forecast model is given by the formula:
Forecast for next period = (Smoothing constant x Actual value) + [(1 - Smoothing constant) x Forecast for previous period]
Using a smoothing constant of 0.8, the forecast for the year 2003 would be:
Forecast for 2003 = (0.8 x 55) + (0.2 x 50) = 44 + 10 = 54 (in thousands)
Therefore, the closest option to the forecast for the year 2003 is C) 66 units.
Forecast for next period = (Smoothing constant x Actual value) + [(1 - Smoothing constant) x Forecast for previous period]
Using a smoothing constant of 0.8, the forecast for the year 2003 would be:
Forecast for 2003 = (0.8 x 55) + (0.2 x 50) = 44 + 10 = 54 (in thousands)
Therefore, the closest option to the forecast for the year 2003 is C) 66 units.
Learning Objectives
- Leverage previous data to estimate upcoming sales using approaches such as moving average models and exponential smoothing.
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