Question

The sale of cycles in a shop in four consecutive months are given as 70, 68, 82, 95. Exponential smoothing average method with a smoothing factor of 0.4 is used in forecasting. The expected number of sales in the next month is

• A. 72
• B. 86
• C. 59
• D. 136

Answer 1

The correct option is B 86

Taking forecasts for the first period equal to demand.

$F_t=F_{t-1}+\alpha e_{t-1}$

$D_i$	$F_i$	$e_i$
70	70	0
68	70	-2
82	69.2	12.8
95	74.32	20.68
	82.59

Hence the closest answer is 86.