Question

5. Determine the best value of alpha and gamma. Show your work on a spreadsheet. 6. Use L25 and T25 from the template of the model you obtained in question ‘5’ to calculate the forecast for months 26, 27, and 28. If you could not get the optimal alpha and gamma, use instead alpha = 0.8 and gamma = 0.2 to obtain L25 and T25, and now calculate the requested forecasts. Show your calculations. 7. As a matter of policy, management will approve borrowing up to a total of $2,000,000 a month (which, in our data set, will be a value of 2000 since the data appear in thousands). For next month (month 26), how confident can management be that all the demand will be met (that is predicted sales will not exceed $2,000,000)? You can use trial and error, or goal seek with the template.

Answer 1