For a given data group, simple exponential smoothing is being used to forecast demand. The forecast of a given period is 110, which turned out to be 4 units more than actual demand. The forecast for next period is 109.2. Based on information given, what is smoothing constant, alpha? Select one:

a. 0.20
b. 0.10
c. 0.15
d. None of the choices
e. 0.60

The smoothing constant alpha is 0.20 (Option a)

Step-by-step explanation:

To solve this problem, first we write the succession of the simple exponential smoothing:

Where s(t) is the forecast for period t, s(t-1) is the forecast for period (t-1), xt is the real demand for period t, and alpha is the smoothing constant.

All but the alpha constant are known

s(t)=109.2

s(t-2)=110

xt=110-4=106

Then, we can calculate alpha as:

6 cm

step-by-step explanation:

step-by-step explanation:

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