The manager of a service station wants to forecast the demand of unleaded gasoline next month in order to place an order with the distributor. The manager has accumulated ten months of demand data. Use this data to answer the following TWO questions.month gasoline demandedOctober 360November 326December 284January 225February 290March 311April 329May 365June 540July 441 Flag question: Question 2Question 2Tips8.5 ptsCompute an exponentially smoothed forecast for August, using an 𝛼 value of 0.30. Round to two decimal places.
Question
The manager of a service station wants to forecast the demand of unleaded gasoline next month in order to place an order with the distributor. The manager has accumulated ten months of demand data. Use this data to answer the following TWO questions.month gasoline demandedOctober 360November 326December 284January 225February 290March 311April 329May 365June 540July 441 Flag question: Question 2Question 2Tips8.5 ptsCompute an exponentially smoothed forecast for August, using an 𝛼 value of 0.30. Round to two decimal places.
Solution 1
To compute an exponentially smoothed forecast, we use the formula:
Ft = α * Dt-1 + (1 - α) * Ft-1
where: Ft = Forecast for the upcoming period Dt-1 = Demand in the previous period Ft-1 = Forecast for the previous period α = Smoothing constant (in this case, 0.30)
However, we don't have the data for August, so we can't compute the forecast for August directly. We need to compute the forecasts for the previous months first, starting from November (since we have the demand for October).
Unfortunately, without the initial forecast (F0), we can't start the calculations. The initial forecast could be given, or it could be the demand of the first period (October in this case), or it could be an average of the initial periods.
Once we have the initial forecast, we can use the formula to compute the forecasts for the following months, up to July. The forecast for August would be the forecast computed using the demand for July.
Please provide the initial forecast or specify how it should be computed.
Solution 2
To compute an exponentially smoothed forecast, we need to have the demand data for the previous month (July in this case). However, the data for August is not provided in the question.
The formula for exponential smoothing is:
Ft = Ft-1 + α(Dt-1 - Ft-1)
where: Ft = Forecast for the upcoming period Ft-1 = Forecast of the current period α = Smoothing constant (0.30 in this case) Dt-1 = Demand in the current period
Without the August data, we cannot compute the forecast for September. Please provide the complete data to proceed with the calculation.
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