Question

1.      A salesperson at a convenience store has been monitoring the demand for 1-gallon milk bottles...

1.      A salesperson at a convenience store has been monitoring the demand for 1-gallon milk bottles of a particular brand. The actual demand during the last 5 weeks is shown below:

WEEK

ACTUAL DEMAND

(number of milk bottles sold)

Five weeks ago

300

Four weeks ago

310

Three weeks ago

321

Two weeks ago

330

One week ago

340

THIS WEEK

ACTUAL DEMAND NOT KNOWN

Use trend-adjusted exponential smoothing to obtain the demand forecast for THIS WEEK. Use the following:

Exponentially smoothed forecast five weeks ago = 289 milk bottles

Exponentially smoothed trend estimate five weeks ago = 10 milk bottles

                                           The smoothing constants: = 0.4, = 0.5.

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