Question

Use exponential smoothing with ? = 0.4 to forecast donut sales for May. Assume that the forecast for January was for 28 donuts.

Month	Donut Sales
January	32
February	33
March	28
April	39

Use Excel Quiz 5, Exponential Smoothing, round to two decimal places

Answer 1

The formula for calculating the exponential smoothing is Ft+1 = αAt + (1 - α) Ft
Month	Donut Sales	Forecast
January	32	28.00
February	33	29.60
March	28	30.96
April	39	29.78
May		33.47
Working
F(February)	0.4 x 32 + 0.6 x 28 = 29.60
F(March)	0.4 x 33 + 0.6 x 29.60 = 30.96
F(April)	0.4 x 28 + 0.6 x 30.96 = 29.78
F(May)	0.4 x 39 + 0.6 x 29.78 = 33.47