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Chapter 4: Q7PE (page 485)

If the demand in the current week was 102 units and we had forecast it to be 125, what would be next week’s forecast using an exponential smoothing model with an alpha of 0.3?

Short Answer

Expert verified

118 units

Step by step solution

01

Forecasting

The technique of forecasting the outcome is based on historical and current data. These can then be matched to what occurs is calledForecasting.

02

  Calculating the next week’s forecast

Given,

Alpha= 0.3

Previous actual sales = 102

Previous forecast = 125

The equation of the Exponential smoothing model:

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