GATE ME 2020 Set 2 — Question 43
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Industrial Engineering → Production Planning & Control → Forecasting Models
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Question
The forecast for the monthly demand of a product is given in the table below.
The forecast is made by using the exponential smoothing method. The exponential smoothing coefficient used in forecasting the demand is
| Month | Forecast | Actual Sales |
|---|---|---|
| 1 | 32.00 | 30.00 |
| 2 | 31.80 | 32.00 |
| 3 | 31.82 | 30.00 |
Correct answer
(A) 0.10
Solution
The formula for exponential smoothing is:where:
, ,
Verification with Month 3:
This matches the value in the table. Thus, .
- is the forecast for the current period,
- is the forecast for the previous period,
- is the actual sales for the previous period,
- is the smoothing coefficient.
, ,
Verification with Month 3:
This matches the value in the table. Thus, .
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