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Industrial Engineering Miscellaneous

Industrial Engineering

  1. The sales of a product during the last four years were 860, 880,870 and 890 units. The forecast for the fourth year was 876 units. If the forecast for the fifth year, using simple exponential smoothing, is equal to the forecast using a three period moving average the value of the exponential smoothing constant α is
    1. 1/7
    2. 1.5
    3. 2/7
    4. 2/5
Correct Option: C

F4 = 876 units

F5 = F3

F3 =
890 + 870 + 880
2

F5 = F4 + α (D4 – F4)
880 = 876 + α (890 – 876)
α =
2
7



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