A counseling service records the number of calls to their hotline for the last year. What is the forecast for August if the forecast for June was 164 and the service uses exponential smoothing with an alpha of 0.8?Month DemandJanuary 111February 127March 146April 159May 165June 165July 178August 182September 191October 208November 223December 228

175.36

Explanation:

Given that,

Demand data for various month is given.

Forecast for July = 164

Alpha = 0.8

Calculation of forecast by using the exponential smoothing method:

F(t+1) = ∝Y(t) + (1 - ∝)F(t)

F(t+1) represents forecast value of (t+1)

∝ = Smoothing constant

Y(t) = Actual value of period t

F(t) = Forecast of period t

For the month of July,

F(t+1) = ∝Y(t) + (1 - ∝)F(t)

        = (0.8 × 165) + [(1 - 0.8) × 164]

        = 132 + 32.8

        = 164.8

For the month of August,

F(t+1) = ∝Y(t) + (1 - ∝)F(t)

        = (0.8 × 178) + [(1 - 0.8) × 164.8]

        = 142.4 + 32.96

        = 175.36

Therefore, the forecast for August is 175.36 if the forecast for June was 164.

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