Application of trend-enhanced exponential

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Reference no: EM13819593

Suppose a previous application of trend-enhanced exponential smoothing with α = .2 and β = .4 to the data below resulted in a Period 7 forecast of 69.3 along with an MFE of –0.1 and MAD of 2.6. A manager is now considering changing the values of α and β.

Period: 1 2 3 4 5 6

Demand: 19 33 37 49 52 60

a. Re-apply the trend-enhanced exponential smoothing model with α = .4 and β = .8 to the above data to compute the new forecast for Period 7 and the resultant MFE and MAD based on Period 1-6 error values. Assume that FIT1 = 22 and T1 = 7.83. (Negative answers should be indicated by a minus sign. Round your intermediate calculations and final answers to 1 decimal place.)

Forecast for period 7 --- ???

MFE --- ???

MAD --- ???

b. Which model gives a better approximation of the demand pattern for periods 1 through 6?

____ Trend enhanced smoothing based forecasts with α = .4 and β = .8

____Trend enhanced smoothing based forecasts with α = .2 and β = .4

Reference no: EM13819593

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