Suppose That You Are Using Exponential Smoothing with 

question 89

Multiple Choice

Suppose that you are using exponential smoothing with  = 0.5 and your initial forecast 5 months ago was for 100 units. If the actual demand last month was 0 units, which of the following is definitely true?

• A) The forecast for this month should be 0.
• B) The model blew up. You can't use exponential smoothing anymore.
• C) The forecast for last month was 0.
• D) The forecast for this month should be 50.
• E) We need more information to determine this month's forecast.

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Definitions:

Unadjusted Trial Balance

A listing of all accounts in the general ledger before any adjustments are made for the end of the reporting period.

Vertical Analysis

A financial analysis tool that compares each item in a financial statement to a base figure within the same statement, expressed as a percentage.

Operating Income

Income generated from a company's primary business operations, excluding revenue and expenses from non-operating activities such as investments.

Revenue

The total income generated by a business from its operational activities, such as sales of goods or services, before any expenses are deducted.