For a hotel, the actual demand for disposable cup was 600 units in January and 700 units February. The forecast for the month of January was 500 units. What will be forecast for the month of March. Use simple exponential smoothening method. [Smoothening coefficient = 0.8]

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For a hotel, the actual demand for disposable cup was 600 units in January and 700 units February. The forecast for the month of January was 500 units. What will be forecast for the month of March. Use simple exponential smoothening method. [Smoothening coefficient = 0.8]

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Answer 1

Concept:

In Simple Exponential Smoothing, the forecast is updated based on the previous actual and forecasted values using the formula:

\( F_{t} = \alpha A_{t-1} + (1 - \alpha) F_{t-1} \)

Where, F_t is the forecast for the current period, \(A_{t-1}\) is the actual demand of the previous period, and \(F_{t-1}\) is the forecast for the previous period.

Calculation:

Given:

Actual demand in January = 600 units, Forecast for January = 500 units

Actual demand in February = 700 units

Smoothing coefficient, \(\alpha\) = 0.8

Forecast for February:

\( F_{Feb} = 0.8 \times 600 + 0.2 \times 500 = 480 + 100 = 580 \)

Forecast for March:

\( F_{Mar} = 0.8 \times 700 + 0.2 \times 580 = 560 + 116 = 676 \)

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For a hotel, the actual demand for disposable cup was 600 units in January and 700 units February. The forecast for the month of January was 500 units. What will be forecast for the month of March. Use simple exponential smoothening method. [Smoothening coefficient = 0.8]

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