The purchasing and supply department needs to forecast the number of tubes of adhesive being ordered....

The purchasing and supply department needs to forecast the number of tubes of adhesive being ordered. The data for several months is supplied below. Be careful since the data is listed beginning with the most recent. The forecasting method to be used here is exponential smoothing accounting for seasonality with a smoothing constant of 0.35 and a previous forecast (with seasonality) of 635. Please round your forecast to the nearest whole number.

Jul 2020: 588	Jun 2020: 508	May 2020: 689	Apr 2020: 500	Mar 2020: 689	Feb 2020: 540
Jan 2020: 568	Dec 2019: 680	Nov 2019: 695	Oct 2019: 565	Sep 2019: 680	Aug 2019: 514
Jul 2019: 696	Jun 2019: 516	May 2019: 629	Apr 2019: 671	Mar 2019: 686	Feb 2019: 506
Jan 2019: 589	Dec 2018: 555	Nov 2018: 605	Oct 2018: 538	Sep 2018: 607	Aug 2018: 540
Jul 2018: 650	Jun 2018: 599	May 2018: 528	Apr 2018: 681	Mar 2018: 679	Feb 2018: 535
Jan 2018: 587	Dec 2017: 566

Solutions

Expert Solution

Solution:

The formula to find the forecasting using exponential smoothing method is F_t+1=D_t+(1-)F_t

where F_t+1 is the forecast demand for period t.

is the smoothing constant

D_t is the previous period's actual demand

F_t is the previous period's forecast demand

Given:=0.35 and Pervious forecast=635

Period	Demand	Forecast(F_t+1=D_t+(1-)F_t)
Dec 2017:	566	635
Jan 2018:	587	(0.35*566)+(1-0.35)635=611
Feb 2018:	535	(0.35*587)+(1-0.35)611=603
Mar 2018:	679	(0.35*535)+(1-0.35)603=579
Apr 2018:	681	(0.35*679)+(1-0.35)579=614
May 2018:	528	(0.35*681)+(1-0.35)614=637
Jun 2018:	599	(0.35*528)+(1-0.35)637=599
Jul 2018:	650	(0.35*599)+(1-0.35)599=599
Aug 2018:	540	(0.35*650)+(1-0.35)599=617
Sep 2018:	607	(0.35*540)+(1-0.35)617=590
Oct 2018:	538	(0.35*607)+(1-0.35)590=596
Nov 2018:	605	(0.35*538)+(1-0.35)596=576
Dec 2018:	555	(0.35*605)+(1-0.35)576=586
Jan 2019:	589	(0.35*555)+(1-0.35)586=575
Feb 2019:	506	(0.35*589)+(1-0.35)575=580
Mar 2019:	686	(0.35*506)+(1-0.35)580=554
Apr 2019:	671	(0.35*686)+(1-0.35)554=600
May 2019:	629	(0.35*671)+(1-0.35)600=625
Jun 2019:	516	(0.35*629)+(1-0.35)625=626
Jul 2019:	696	(0.35*516)+(1-0.35)626=588
Aug 2019:	514	(0.35*696)+(1-0.35)588=626
Sep 2019:	680	(0.35*514)+(1-0.35)626=587
Oct 2019:	565	(0.35*680)+(1-0.35)587=619
Nov 2019:	695	(0.35*565)+(1-0.35)619=600
Dec 2019:	680	(0.35*695)+(1-0.35)600=633
Jan 2020:	568	(0.35*680)+(1-0.35)633=650
Feb 2020:	540	(0.35*568)+(1-0.35)650=621
Mar 2020:	689	(0.35*540)+(1-0.35)621=593
Apr 2020:	500	(0.35*689)+(1-0.35)593=626
May 2020:	689	(0.35*500)+(1-0.35)626=582
Jun 2020:	508	(0.35*689)+(1-0.35)582=620
Jul 2020:	588	(0.35*508)+(1-0.35)620=581

orchestra answered 1 year ago

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