number 3 Question (3 points) Given the values in the table below, use exponentia

Question

number 3

Question (3 points) Given the values in the table below, use exponential smoothing with trend (with both smoothin constants set to 0.2) to i) calculate the smoothed estimate and smoothed trend for periods 1 and 2, and ii) calculate the forecast for periods 2 and 3. Make sure that you show your work. Month Demand smoothed i stimate smoothed Trend Forecast 05 A forecast has errors of 2, and 1.1, The forecast error variance (from past data) is 0.36 Test, using a tracking signal, to see if the forecast is unbiased SD confidence intervals a smoothing constant of 0.3) What would you expect several sequential values of the smooth absolute forecast error to be if the forecast is unbiased?

Explanation / Answer

Acceptable range of tracking signal: +/- 0.55 (3) SQRT(0.3) = +/- 0.9037

The forecast is unbiased since the values of the signal are within the acceptable range.

you would expect small, positive values with some random variation of the smoothed absolute forecast error to be, given that the forecast is unbiased.

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