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Example of Exponential Smoothing
By using the previous example and smoothing constant 0.3 generate monthly forecasts
Months
Sales
Forecasts: a = 0.3
January
1200
February
1280
March
1310
1224
April
1270
1250
May
1190
1256
June
1290
1233
July
1410
August
1360
1283
September
1430
1327
October
1358
November
1335
December
1390
1357
Solution
Since there were no forecasts before January we take Jan to be the forecast for February.
∴ Feb - 1200
For March;
March forecast = Feb forecast + 0.3 ( Feb sales - Feb forecast)
= 1200 + 0.3 (1280 - 1200) =1224
Note:
3^2=8
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