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Given a prior forecast demand value of 1,000, a related actual demand value of 1100, and a smoothing constant alpha of 0.2, what is the exponential smoothing forecast value? Group of answer choices 1080 1020 1120 1180 980

Question

Given a prior forecast demand value of 1,000, a related actual demand value of 1100, and a smoothing constant alpha of 0.2, what is the exponential smoothing forecast value? Group of answer choices

1080

1020

1120

1180

980

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Solution

The exponential smoothing forecast value can be calculated using the formula:

Forecast = α * (Actual Demand) + (1 - α) * (Prior Forecast)

where α is the smoothing constant.

Substituting the given values into the formula:

Forecast = 0.2 * 1100 + (1 - 0.2) * 1000 Forecast = 220 + 800 Forecast = 1020

So, the exponential smoothing forecast value is 1020.

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