Exponential Smoothing was performed on the yearly sales data to forecast. Two values of the exponential smoothing constant, alpha was used.  The error analysis is indicated below.  Use the error analysis to determine which value of alpha is best to use for forecasting.  Alpha = 0.1                                                                                          year sales $1000s forecast absolute deviation   1 20       2 13 20.00 7   3 19 19.30 0.3   4 19 19.27 0.27   5 25 19.24 5.757   6 17 19.82 2.8187   7 15 19.54 4.53683   8 13 19.08 6.083147   9 22 18.47 3.5251677   10 20 18.83 1.17265093   11   18.94 18.94461416         5.040810979 MAD   Alpha = 0.5 year sales $1000s forecast absolute deviation   1 20       2 13 20.00 7   3 19 16.50 2.5   4 19 17.75 1.25   5 25 18.38 6.625   6 17 21.69 4.6875   7 15 19.34 4.34375   8 13 17.17 4.171875   9 22 15.09 6.9140625   10 20 18.54 1.45703125   11   19.27 19.27148438         5.822070313 MAD

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Exponential Smoothing was performed on the yearly sales data to forecast. Two values of the exponential smoothing constant, alpha was used.  The error analysis is indicated below.  Use the error analysis to determine which value of alpha is best to use for forecasting. 

Alpha = 0.1                                                                                         

year

sales $1000s

forecast

absolute deviation

 

1

20

 

 

 

2

13

20.00

7

 

3

19

19.30

0.3

 

4

19

19.27

0.27

 

5

25

19.24

5.757

 

6

17

19.82

2.8187

 

7

15

19.54

4.53683

 

8

13

19.08

6.083147

 

9

22

18.47

3.5251677

 

10

20

18.83

1.17265093

 

11

 

18.94

18.94461416

 
     

5.040810979

MAD

 

Alpha = 0.5

year

sales $1000s

forecast

absolute deviation

 

1

20

 

 

 

2

13

20.00

7

 

3

19

16.50

2.5

 

4

19

17.75

1.25

 

5

25

18.38

6.625

 

6

17

21.69

4.6875

 

7

15

19.34

4.34375

 

8

13

17.17

4.171875

 

9

22

15.09

6.9140625

 

10

20

18.54

1.45703125

 

11

 

19.27

19.27148438

 
     

5.822070313

MAD

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