Exponential smoothing forecast
The forecast level of sales for the month of May was 240 units. Actual sales in May turned out to be 200 units. Use an exponential smoothing coefficient of 0.8 to forecast sales for June.
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With exponential smoothing, we estimate how much the past affects the future. The formula for single exponential smoothing is:
S(t+ ...
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Use of exponential smoothing to forecast sales
Compute an exponential smoothing forecast with a=0.20, an adjusted exponential smoothing forecast with a=0.20 and b=0.20 and a linear trend line forecast. Compare the three forecasts using MAD and average error (E) and indicate which forecast seems to be most accurate.
The Oceanside hotel is adjacent to city coliseum, a 24,000-seat arena that is home to the city's professional basketball and ice hockey teams and that hosts a variety of concerts, trade shows, and conventions throughout the year. The hotel has experienced the following occupancy rates for the nice years since the coliseum opened:
Year
1 75%
2 70
3 72
4 77
5 83
6 81
7 86
8 91
9 87
Compute an exponential smoothing forecast with a=0.20, an adjusted exponential smoothing forecast with a=0.20 and b=0.20 and a linear trend line forecast. Compare the three forecasts using MAD and average error (E) and indicate which forecast seems to be most accurate