Calculate the exponential smoothing forecast for Week 3 using a smoothing constant of 0.2.
The forecast for Week 1 is 32. The time-series data follow... Accounting MCQs | Accounting MCQs

Calculate the exponential smoothing forecast for Week 3 using a smoothing constant of 0.2.
The forecast for Week 1 is 32. The time-series data follows.
Week.. Sales
1 .........32
2 .........36

32.0032.8025.6038.40Show Result

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Detailed Answer

Answer (B) is correct.
The exponential smoothing forecast for the following period is the sum
of two components: (1) the current period’s actual results multiplied by
the smoothing factor and (2) the current period’s forecast multiplied by
the smoothing factor’s complement. Therefore, the exponential
smoothing forecast for Week 2 is 32 [(32 × 0.2) + (32 × 0.8)], and the
forecast for Week 3 is 32.8 [(36 × 0.2) + (32 × 0.8)].