A Company Wants to Generate a Forecast for Unit Demand

question 33

Multiple Choice

A company wants to generate a forecast for unit demand for year 2014 using exponential smoothing.The actual demand in year 2013 was 120.The forecast demand in year 2013 was 110.Using this data and a smoothing constant alpha of 0.1,which of the following is the resulting year 2014 forecast value?

• A) 100
• B) 110
• C) 111
• D) 114
• E) 120

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Definitions:

Quantity Demanded

The aggregate quantity of a product or service that buyers are prepared and capable of buying at a certain price point.

Equilibrium Price

The cost at which the amount of a product or service that consumers want to buy matches the amount that producers are willing to sell, creating a balanced market situation.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various price levels, at a given point in time.

Supply

The total amount of a good or service available for purchase at any given price.