Assume that the forecast for the last period is FITt 200 units, and recent experience suggests a likely sales increase of 10 units each period. Actual sales for the last period reached 230 units. Assume a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10. What is the forecast for the next period?

Assume that the forecast for the last period is FITt 200 units, and recent experience suggests a likely sales increase of 10 units each period. Actual sales for the last period reached 230 units. Assume a smoothing coefficient of α = 0.20 and a trend smoothing coefficient of β = 0.10. What is the forecast for the next period?

 

Solution

Ft+1 = FITt + α (dt – FITt)

200 + 0.20 (230 – 200) = 206

Forecast for the next period =206