A counseling service records the number of calls to their hotline for the last year.

Month Demand

January 111

February 127

March 146

April 159

May 165

June 165

July 178

August 182

September 191

October 208

November 223

December 228

1. What is the forecast for August if the forecast for June was 164 and the service uses exponential smoothing with an alpha of 0.8?

175.36

Explanation:

Given:

Forecast factor ∝ = 0.8

To find forecast off August, we have to find forecast of July.

July month forecast = (Actual Demand of last month x factor) [ (1-factor) x Expected forecast]

= (165 x 0.8) + [ (1-0.8) x 164]

= 132 + 32.8

= 164.8

August forecast = (Actual Demand of last month x factor) [ (1-factor) x Expected forecast]

= (178 x 0.8) + [ (1-0.8) x 164.8]

= 142.4 + 32.96

August forecast = 175.36