Question:-
A company intends to use exponential smoothing technique for making a forecast for one of its products. The previous year’s forecast has been 78 units and the actual demand for the corresponding period turned out to be 73 units. If the value of the smoothening constant a is 0.2, the forecast for the next period will be.
Option (A)
73 units
Option (B)
75 units
Option(C)
77 units
Option(D)
78 units
Correct Option:
(C)
Question Solution:
Fn = ayn-1 + (1-a) Fn-1
= (0.2)(73) + (1-0.2) 78 = 14.6 + 62.4 = 77
question-answer-faq-8738