Use Solver to Determine the Alpha That Minimizes the MAD

question 72

Multiple Choice

Use Solver to determine the alpha that minimizes the MAD for the exponential smoothing forecast for the data that appear in this table.Use the actual demand of period 1 as the forecast for period 2 and then use the forecasts for periods 2 through 9 to calculate MAD. $$\begin{array} { | c | c | } \hline \text { Period } & \text { Demand } \\\hline 1 & 272 \\\hline 2 & 278 \\\hline 3 & 269 \\\hline 4 & 280 \\\hline 5 & 267 \\\hline 6 & 258 \\\hline 7 & 278 \\\hline 8 & 298 \\\hline 9 & 286 \\\hline 10 & 290 \\\hline\end{array}$$

• A)0.36
• B)0.43
• C)0.54
• D)0.62

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Definitions:

Occupancy Expenses

Costs associated with occupying a space, such as rent, utilities, and property taxes.

Client-Visits

Client-visits refer to the number of times clients or customers physically or virtually engage with a service provider, indicating the level of interaction or patronage.

Client-Visits

The number of times clients come to a business location or are visited by the business's representatives for services or sales activities.

Activity Variance

The difference between the budgeted cost of activities planned vs. the actual cost of activities incurred.