Answered: What is the Simple Exponential…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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What is the Simple Exponential Smoothing forecast for September if we use alpha smoothing constant of .2 and March initial forecast is 19?

Month	Month	Sales
Feb	1	19
Mar	2	18
Apr	3	15
May	4	20
Jun	5	18
Jul	6	22
Aug	7	20

Expert Solution

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Simple exponential Smoothing is time series forecasting method. It is calculated with following formula:-

$F_{t + 1} = σ * A_{t} + (1 - σ) * F_{t} F_{t + 1} = C u r r e n t f o r e c a s t A_{t} = A c t u a l d e m a n d o f p a s t p e r i o d F_{t} = F o r e c a s t d e m a n d o f p a s t p e r i o d$

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