Question

A firm uses exponential smoothing method to forecast demand. In period 10, the forecast was 90 and the actual demand was 100. If the smoothing constant is equal to 0.10, then what is the forecast for period 11?

a. 91
b. 101
c. 99
d. none of the choices are correct
e. 89

Answer 1

c. 99

Step-by-step explanation:

Calculation to determine the forecast for period 11

Using this formula

Forecast for period 11=Forecast *Smoothing constant*Period 11 Forecast

Let plug in the formula

Forecast for period 11=90*.10*11

Forecast for period 11=99

Therefore the forecast for period 11 is 99