### Exponential Smoothing

1. Understand the advantages, disadvantages and applications of Exponential Smoothing forecasting technique.

$\hat{d}_t=\alpha d_{t-1} + (1 - \alpha) \hat{d}_{t-1}... \mathrm{Page\ 423\ of\ FE\ Handbook}$ $\hat{d}_t$ = forecast for demand t
$\alpha$ = smoothing constant $0\leq \alpha \leq 1$

### Solved Example:

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In exponential smoothening method, which one of the following is true? (PY 15: GATE ME 2014: Shift I)

Correct Answer: B

### Solved Example:

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Which of the following forecasting methods takes a fraction of forecast error into account for the next period forecast? (VIZAG MT Mechanical: 2013)

Correct Answer: D

### Solved Example:

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The sale of cycles in a shop in four consecutive months are given as 70, 68, 82, 95. Exponentially smoothing average method with a smoothing factor of 0.4 is used in forecasting. The expected number of sales in the next month is: (VIZAG MT Mech 2013 Re-exam)

Correct Answer: C

### Solved Example:

#### 9046-04

For a canteen, the actual demand for disposable cups was 500 units in January and 600 units in February. The forecast for the month of January was 400 units. The forecast for the month of March considering smoothing coefficient as 0.75 is: (PY 12: GATE ME 2015- Shift I)

Correct Answer: C

### Solved Example:

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Which of the following is a technique used for forecasting? (MPSC AMVI 2002)

Correct Answer: B

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The current period forecast becomes equal to last period forecast for the value of smoothing constant equal to: (BPSC AE Paper VI Mech 2012)

Correct Answer: C

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In simple exponential smoothing forecasting, to give higher weightage to recent demand information, the smoothing constant must be close to: (PY 19: GATE ME 2013)

Correct Answer: D

### Solved Example:

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In a calendar year, the demand forecast of motorbikes for the month of June is 200. The actual demand of motorbikes for the month of June and July are 300 and 350, respectively. If single exponential smoothing method with smoothing constant 0.7 is used, then the demand forecast for the month of August is: (GATE PI 2017)

Correct Answer: D

### Solved Example:

#### 9046-09

The forecast and the actual sale of a product for December 2020 were 35 and 30 respectively. If the exponential smoothing constant is taken as 0.2, what will be the forecast for January 2021? (NRL GET Mech Sep 2021 Shift II)

Correct Answer: D