Simple exponential smoothing with = 0.3 is being used to forecast sales of SLR (

Question

Simple exponential smoothing with = 0.3 is being used to forecast sales of SLR (single lens reflex) cameras at an appliance store. Forecasts are made on a monthly basis. After August camera sales are observed, the forecast for September is 100 cameras.

a. During September, 120 cameras are sold. After observing September sales, what is the forecast for October camera sales?
_106_

What is the forecast for November camera sales?
_106_

b. It turns out that June sales were recorded as 10 cameras. Actually, however, 100 cameras were sold in June. After correcting for this error, what is the forecast for October camera sales? (Round your answer to one decimal place.) _______

Explanation / Answer

b. Since June sales are 100 rather than 10, thus , the forecasts henceforth will be 10% less than it should be , thus , the forecast for october will be
=106*1/0.90
=117.778
=118
Thus on rectification , we find that the new forecast for October will be =118

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