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Vikentia
2 months ago
9

Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out to be four units less than

actual demand. The next forecast is 66.6, implying a smoothing constant, alpha, equal to _____ ? The answer is alpa 15, but how did you get the answer?
Business
1 answer:
Katen [3.5K]2 months ago
5 0

Answer:

15

Explanation:

The Exponential smoothing model can be expressed as follows:

Ft= Ft-1 + α (At-1 – Ft-1)

Where,

Ft= new forecast

Ft-1= forecast from the previous period

At-1= last period's actual demand

α =? Ft-1=66 At-1=70 Ft= 66.6

Thus, it can be written as: Ft = 66 + α (70-66)

66.6 = 66 + 4* α

(66.6-66)= 4* α

α = 0.6/4

α = 0.15

Therefore, the alpha value is 0.15 for basic exponential smoothing.

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