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    Operational management: Calculate Sales Forecasts

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    3 The following tabulations are actual sales of units for six months and a starting forecast in January.

    a. Calculate forecasts for the remaining five months using simple exponential smoothing with α = 0.2.

    b. Calculate MAD for the forecasts.
    January 100 80
    February 94
    March 106
    April 80
    May 68
    June 94

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    Solution Preview

    Please see the attached file.

    t Month Actual Smoothed Forecast % error
    1 January 100 84.0 ...

    Solution Summary

    This solution shows step-by-step calculations in an Excel file to determine sale forecast from January to June using simple exponential smoothing. A mean squared error, mean absolute percent error and percent positive errors are also calculated.