Simple Exponential Smoothing Is Being Used to Forecast Demand

question 35

Multiple Choice

Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out to be four units less than actual demand. The next forecast is 66.6, implying a smoothing constant, alpha, equal to:

• A) .01.
• B) .10.
• C) .15.
• D) .20.
• E) .60.

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Definitions:

Cash Manager

A professional responsible for managing a company's cash inflows and outflows, ensuring sufficient liquidity for operations.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Net Working Capital

A measure of a company's liquidity, calculated as current assets minus current liabilities.

Inventory Sale

The process of selling goods that a company has produced or purchased for resale.