Question

The demand and forecast for February are 12000 and 10275, respectively. Using single exponential smoothing method (smoothing coefficient = 0.25), forecast for the month of March is

• A. 9587
• B. 11000
• C. 431
• D. 10706

Answer 1

The correct option is D 10706

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

$F_t=\text{current month forecast}$

$F_{t-1}=\text{last month forecast}$

$D_{t-1}=\text{last month demand}$

$\alpha =\text{smoothening constant}$

$F_t=10275+0.25(12000-10275)$

$F_t=10706.25,F_t=10706$