Question

The “Economic Report to the President of the United States” included data on the amounts of manufacturers′ new and unfilled orders in millions of dollars. Shown here are the figures for new orders over a 8-year period:

Year	Order
1	54,097
2	54,259
3	55,022
4	55,921
5	62,941
6	64,182
7	72,553
8	76,003

What would be the forecast for years 2, 3, 4, 5, 6, 7, 8 and 9 using simple exponential smoothing model, given α = 0.3.

Answer 1

For second year by using formula

54097+0.3⋅(54097−54097)=54097

For third year

54097+0.3⋅(54259−54097)=54145.6

For fourth year

54145.6+0.3⋅(55022−54145.6)=54408.52

For fifth year

54408.52+0.3⋅(55921−54408.52)=54862.264

For sixth year

54862.264+0.3⋅(62941−54862.264)=57285.8848

For seventh year

57285.8848+0.3⋅(64182−57285.8848)=59354.7194

For Eigth year

59354.71936+0.3⋅(72553−59354.71936)=63314.2036

For ninth year

63314.203552+0.3⋅(76003−63314.203552)=67120.8425