Answer :
The simple exponential smoothing forecast for the next period would be 96.4. Given an actual demand of 100, a forecasted value of 94, and an alpha of .4, the simple exponential smoothing forecast for the next period would be 96.4.
It is based on the concept of the weighted average of the past observations. The idea behind this method is that recent data points are given more weight than the older ones. The formula for Simple exponential smoothing is:Ft+1 = αYt + (1- α) Ft where, Ft+1 is the forecasted value for the next periodα is the smoothing constant Yt is the actual value for the present period.
Ft is the forecasted value for the present period. Given values are, Actual demand (Yt) = 100Forecasted demand (Ft) = 94Alpha (α) = 0.4Now, substituting these values in the formula:Ft+1 = αYt + (1- α) FtFt+1 = (0.4 × 100) + (0.6 × 94)Ft+1 = 40 + 56.4Ft+1 = 96.4Hence, the simple exponential smoothing forecast for the next period would be 96.4.
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