Question

In January, a car dealer predicted ''February'' demand as 200 cars but the actual demand turned out to be 235 cars. The forecast for the month of march using smoothing constant as 0.4 is ___

• A. 200
• B. 214
• C. 212
• D. 213

Answer 1

The correct option is B 214

$\text{New forecast = Old Forecast}+\alpha (\text{Demand}-\text{Old forecast})$

$\text{Prediction = Forecast}$

$\Rightarrow F_{\text{feb}}=200;D_{\text{feb}}=235$

$F_{t+1}=F_t+\alpha (D_t-F_t)$

$F_{\text{mar}}=F_{\text{feb}}+\alpha (D_{\text{feb}}-F_{\text{feb}})$

$=200+0.4(235-200)$

$=214$