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

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