Question

An electrical appliances dealer forecasted the demand for geyser as 20 units for the last period. The actual sales for the last period were 15 units. If the smoothing constant is 0.2, the forecast sales of the geyser for the next period will be​

Answer 1

Given : An electrical appliances dealer forecasted the demand for geyser as 20 units for the last period.

The actual sales for the last period were 15 units.

the smoothing constant is 0.2,

To Find :  the forecast sales of the geyser for the next period

Solution:

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

$F_{t+1}=$  forecast for the next period = to be calculated

$F_{t} =$ Forecast for last period = 20

$D_{t} =$ Actual  for the last period  = 15

α = Smoothing constant  = 0.2

Substituting values :

$F_{t+1}=20 + 0.2(15-20)$

$F_{t+1}=19$

Hence the forecast sales of the geyser for the next period will be​ 19

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