Example a Jan forecast is given as 410 0.3 Month Mileage Forecast 0.3

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Example a Jan forecast is given as 410 0.3 Month Mileage Forecast 0.3 Jan 450 410 0.3 Feb 495 422.0 0.3 Mar 518 443.9 0.3 April 563 466.1 0.3 May 584 495.2 0.3 june Exponential Smoothing Example Ft new forecast Ft-1 previous period’s forecast a smoothing (weighting) constant At-1 previous period actual or demand At-1 minus Ft-1 is the forecast error Smoothing constant .05 to .5) higher constant – more weight on recent data lower constant – more weight on past data constant of 1 = naïve forecast (current forecast equals previous period demand) Formula: Ft=Ft-1+alpha(At-1 – Ft-1) Current Forecast = previous period forecast + alpha (forecast error) Forecast error is the actual demand minus the previous forecast

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