Consulting income at Kate Walsh Associates for the period February-July has been

Question

Consulting income at Kate Walsh Associates for the period February-July has been as follows

Compute the exponentially smoothed forecast of calls for each week. Assume an initial forecast of 50 calls in the first week and use a=.1. What is the forecast for the 25th week?

Reforecast each period using a=.6

Actual calls during 25th week were 85. Which smoothing constant provides a superior forecast?

Please show actual formulas and examples for calculating in excel.

Week Calls 1 50 2 35 3 25 4 40 5 45 6 35 7 20 8 30 9 35 10 20 11 15 12 40 13 55 14 35 15 25 16 55 17 55 18 40 19 35 20 60 21 75 22 50 23 40 24 65

Explanation / Answer

here as per exponential smooting

forecast for period t=a*actal in last period +forecast for last perios

hence with a=0.1

total

with a =0.6

forecat for 25 week =57.599

jere mSE for a=0.1 as total MSE is less in a=0.6;it is better.

Week Calls(A) forecast(F) (A-F)^2 1 50 50.000 0.00 2 35 35.000 0.00 3 25 24.500 0.25 4 40 17.450 508.50 5 45 25.745 370.76 6 35 29.575 29.44 7 20 23.957 15.66 8 30 14.396 243.49 9 35 19.440 242.13 10 20 22.944 8.67 11 15 14.294 0.50 12 40 10.429 874.42 13 55 25.043 897.43 14 35 35.504 0.25 15 25 24.550 0.20 16 55 17.455 1409.62 17 55 34.746 410.24 18 40 36.475 12.43 19 35 27.647 54.06 20 60 23.765 1312.99 21 75 38.376 1341.28 22 50 48.838 1.35 23 40 34.884 26.18 24 65 27.488 1407.12 25 41.749 9166.97

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