Business Homework Solutions
Problem
#7515

Ace Business Machines: Calculate a forecast using a trend adjusted smoothing.

The business analyst for Ace Business Machines, Inc. wants to forecast this year's
demand for manual typewriters based on the following historical data:

TIME PERIOD-------DEMAND
5 years ago---------------900
4 years ago---------------                    700
3 years ago---------------                    600
2 years ago---------------                    500
Last year----------------                       300

What is the forecast for this year using trend adjusted (double) smoothing with alpha(1) = 0.3 and alpha(2) = 0.2, if the forecast for last year was 310, the forecast for two years ago was 430, and the trend estimate for last year's forecast was -150?

* Please use 310, 430, -150 instead (if the forecast for last year was 310, the forecast for two years ago was 430, and the trend estimate for last year's forecast was -150).


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