Question

For a product, the forecast and the actual sales for December 2002 were 25 and 20 respectively. If the exponential smoothing constant $\left(\alpha \right)$ is taken as 0.2, the forecast sales for January 2003 would be

• A. 21
• B. 27
• C. 23
• D. 24

Answer 1

The correct option is D 24

$\text{Given data:}$

$D_t=\text{actual sale}=20$

$F_t=\text{forecast sale}=25$

$\text{Now,}{F}_{t+1}=F_1+\alpha (D_t-F_t)$

$=25+0.2(20-25)=24$