Answer (B) is correct . Exponential smoothing is a widespread technique for making projections because it requires less data be kept on hand than the moving average methods. Mathematically, a forecast is arrived at with exponential smoothing according to the following formula: Forecast = (Smoothing factor ¡Á Previous month result) + (Smoothing factor complement ¡Á Previous month forecast) = (0.3 ¡Á 158) + (0.7 ¡Á 148) = 47.4 + 103.6 = 151
Answer (A) is incorrect because Exponential smoothing involves more than simply using one month’s forecast as the forecast for the following month.
Answer (C) is incorrect because This number results from reversing the smoothing factor and smoothing factor complement.
Answer (D) is incorrect because Exponential smoothing involves more than simply using one month’s actual demand as the forecast for the following month.
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