Income at the architectural firm Spraggins and Yunes for the period February to
ID: 2928524 • Letter: I
Question
Income at the architectural firm Spraggins and Yunes for the period February to July was as follows: Month February March AprilMay ne July Income (5000s) 760 715 664 723 73.5 740 5.0 Assume that the initial forecast for February is 70 0 (in $ thousands) and the initial trend adjustment is . The smoothing co stants selected are -02 and -02. Using trend-adjusted exponential smoothing, the forecast for the architectural firm's August income is 38.94 thousand dollars (round your response to two decimal places)Explanation / Answer
The forecast table is givne below.
Formula used are
Untrend Forecast
Ft+ 1 = Dt + (1 - )Ft
Trend Additin
Tt+1 = (Ft +1 - Ft ) + (1 - )Tt
Total Trend adjusted Forecast
F = Ft+ 1 + Tt + 1
so AUgust Forecast = 71.97 thousand dollers
Month Income Unadjusted Forecast (a = 0.2) Trend (Beta = 0.2) Adjusted Forecast February 75 70 70 March 71.5 71 0.2 71.2 April 66.4 71.1 0.18 71.28 May 72.3 70.16 -0.044 70.116 June 73.5 70.588 0.0504 70.6384 July 74 71.1704 0.1568 71.3272 August 71.73632 0.238624 71.974944