Blog: Mgt613 GDB No. 1 solution

Total Marks 20

Starting Date : Tuesday, April 26, 2011

Closing Date : Friday, April 29, 2011

Status Open:

Question/Description 

Question: Given the weekly demand data, what are the exponential smoothing forecasts for periods 2-05 using a=0.10?

Week

Demand

0.1

1

860

2

730

3

690

4

610

5

Note: Calculation along with the formula is required for each period's forecast. Students who give answers without calculation will be given low marks/no marks.

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Solution:

Exponential Smoothing Model
Ft = Ft-1 + a (At-1 - Ft-1)
Where
Ft = Forecast value for the coming time period
Ft-1 = Forecast value in 1 past time period
At-1 = Actual occurrence in the 1 past time period
a = Alpha smoothing constant

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Formula Fn= fn-1+a(At-1-Ft-1)
Fn= Forecast value for coming period 
Ft-1= Forecast value in 1 past time period
a= Alpha smoothing constant
At-1= Actual occurance in the 1 Past time period
week Demand 0.1 Calculations Equals
1 860 860 860=0.10(0) 860
2 730 860 860+0.10(860-860) 860
3 690 847 860=0.10(730-860) 847
4 610 831 847=0.10(610-831) 831
5 809 831=0.10(610-831) 809