## Expert Answer

Answer to question a :

Forecast for July

= 0.5 x Demand – June + 0.3 x Demand-May + 0.2 x Demand-April

= 0.5 x 16 + 0.3 x 17 + 0.2 x 13

= 8 + 5.1 + 2.6

= 15.7

JULY FORECAST = 15.7 |

Answer to question b:

Forecast for July

= ( Demand for June + Demand for May + Demand for April ) / 3

= ( 16 + 17 + 13 ) / 3

= 46/3

= 15.3

JULY FORECAST = 15.3 |

Answer to Question C :

Equation for single exponential smoothing with smoothing constant = alpha = 0.2 will be :

Ft = alpha x At-1 + ( 1 – alpha) x Ft-1

= 0.2xAt-1 + 0.8xFt-1

Ft = Forecast for period t

Ft-1 = Forecast for period t-1

At-1 = Actual demand for period t-1

Therefore forecast for July, Ft

= 0.2 x Demand for June + 0.8 x Forecast for June

= 0.2 x 16 + 0.8 x 14

= 3.2 + 11.2

= 14.4

JULY FORECAST = 14.4 |

Answer to question D :

Let the regression equation be :

Y = a + b.t

Where,

T = month number ( e.g 1 for January, 2 for February , 3 for March etc )

Y = Forecasted Demand ( Dependent variable )

A, b = constants

Now, putting the values of t as well as actual values of demand in two separate adjacent columns in excel and applying the formula LINEST ( ) , we get following values for a and b :

A = 11.8

B = 0.77

Therefore ,

Y = 11.8 + 0.77.t

Y = 11.8 + 0.77.T |

Answer to question E :

To find out forecast for July, we need to put value of t as t= 7

Thus ,

Forecast for July = 11.8 + 0.77 x 7 = 11.8 + 5.39 = 17.19

JULY FORECAST = 17.19 |