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Single Exponential Smoothing

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Sunrise sports has experienced rapidly expanding retail sales. Its sales levels for the past 12 years are:

(see data in attached file)

Develop a single exponential smoothing model using Alpha =0.30 . use as a starting value the average of the first 6 years' data. Determine the forecast value for year 2001.

a.) Develop a single exponential table using the data from problem 16-39 and a smoothing constant,
alpha = .30.


b) Calculate the MAD

c) Calculate the MSE

Notice that the directions tell us to set the first forecast value to the average of the first 6 recorded values. Although 4.0 is not the actual average, let us agree to set the first forecast value to 4.0 in order to allow us to focus on the forecasting method rather than getting distracted by more complex calculations.

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Solution Summary

The expert examines single exponential smoothing.

Solution provided by:
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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