Forecast Calculation Using Exponential Smoothing
Explanation:
Calculation to determine the forecast for this period:
Using the formula:
F t+1 = α*D t + (1-α)
Where:
- F t+1 = Forecast for this period
- α = Smoothing constant (0.4 in this case)
- D t = Last period's actual demand
- (1-α) = (1- Last period's demand forecast)
Let's plug in the values:
F t+1 = (0.4 * 21,000 units) + (1 - 0.4 * 20,000 units)
F t+1 = (0.4 * 21,000 units) + (0.60 * 20,000 units)
F t+1 = 8,400 units + 12,000 units
F t+1 = 20,400 units
Therefore, the forecast for this period using exponential smoothing is 20,400 units.