Using exponential smoothing with a weight of 0.6 on actual values:
a) If sales are $45,000 and $50,000 for 2017 and 2018, what would you forecast for 2019? (The first forecast is equal to the actual value of the preceding year)
b) Given the forecast and actual 2019 sales of $53,000, what would you forecast for 2020?

a) The forecast for 2019 can be calculated as follows:  

Forecast sales for 2018 = Actual sales for 2017 = $45,000

Forecast sales for 2019 = (0.6 * Actual sales for 2018) + ((1 - 0.6) * Forecast sales for 2018) = (0.6 * $50,000) + ((1 - 0.6) * $45,000) = $48,000

Therefore, forecast for 2019 would be $48,000.

b) The forecast for 2020 can be calculated as follows:

Forecast sales for 2020 = (0.6 * Actual sales for 2019) + ((1 - 0.6) * Forecast sales for 2019) = (0.6 * $53,000) + ((1 - 0.6) * $48,000) = $51,000

Therefore, forecast for 2020 would be $51,000.

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a. $48,000 is the value forecasted for 2019

b. $51,000 for 2020

Explanation:

In this question, we are to use exponential smoothing to make forecasts

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