Since taking over Nina has been very concerned about the future sales potential.
ID: 392404 • Letter: S
Question
Since taking over Nina has been very concerned about the future sales potential. She knows that if she doesn't reach a certain sales level by the end of the next year the bank will call in all of her debt. She is working on the forecasts and she has put together a forecasting model that incorporates all of the history for sales since the factory was retrofitted with the latest high volume equipment. Given this information she are trying to predict the sales for the next year. She went through the entire process of comparing different methods and settled on exponential smoothing. Sales for the past six years since the new equipment was in place were: Year 2013 2014 2015 2016 2017 2018 Sales 15512 26400 20554 28298 17423 25641 Nina determined that the best possible alpha value was 0.39 and the forecast for 2013 was 23563. What will be the forecast for 2019?Explanation / Answer
F(2014) = 0.39*15512 + 0.61*23563
= 6049.68 + 14373.43
= 20423.11
F(2015) = 0.39*26400 + 0.61*20423.11
= 10296 + 12458.0971
= 22754.0971
F(2016) = 0.39*20554 + 0.61*22754.0971
= 8016.06 + 13880
= 21896.06
F(2017) = 0.39*28298 + 0.61*21896.06
=11036.22 + 13356.5966
= 24392.82
F(2018) = 0.39*17423 + 0.61*24392.82
= 6794.97 + 14879.62
= 21674.59
F(2019) = 0.39*25641 + 0.61*21674.59
=10000 + 13221.5
= 23221.5