MGT613 GDB#1 Solution

Question: Given the weekly demand data, what are the exponential smoothing
forecasts for periods 2-05 using a=0.10?
Week Demand 0.1
1           860       860
2           730         860
3           690        847
4 610 831.3
5 809.17
Ans
Formula
Ft= Ft-1 + a (At-1 – Ft-1)
Ft = Forecast value for the coming time period
F t−1 = Forecast value in 1 past time period
At−1 = Actual occurrence in the 1 past time period
Į = Alpha smoothing constant
Week Demand 0.1 Calculations
1 860 860 =860+.10(0)
= 860
2 730 860 =860+.10(860-860)
=860+.10 (0)
=860
3 690 847 =860+.10(730-860)
=860+.10(-130)
=860-13
=847
4 610 831.3 =847+.10 (690-847)
=847 +.10 (-157)
=847 – 15.7
=831.3
5 809.17 = 831.3+.10(610-831.3)
=831.3 +.10(-221.3)
=831.3 – 22.13
=809.17