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9 February, 12:48

Suppose that Jane's company uses exponential smoothing to make forecasts. Further suppose that last period's demand forecast was for 500 units, and last period's actual demand was 480 units. Jane's company uses an alpha value of. 20. Today Jane's boss asked her to prepare a forecast for this period. What should that forecast be?

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  1. 9 February, 13:26
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    forecast for the period = 496

    Explanation:

    given data

    demand forecast = 500 units

    actual demand = 480 units

    alpha value = 0.20

    to find out

    forecast for this period

    solution

    we get here forecast for the period that is express as

    forecast for the period = Alpha * actual demand + (1 - alpha) * demand forecast ... 1

    put here value we get

    forecast for the period = 0.20 * 480 + (1 - 0.20) * 500

    forecast for the period = 96 + 400

    forecast for the period = 496
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