Use Solver to Determine the Alpha That Minimizes the MSE

question 50

Multiple Choice

Use Solver to determine the alpha that minimizes the MSE 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 MSE. $$\begin{array} { | c | c | } \hline \text { Period } & \text { Demand } \\\hline 1 & 272 \\\hline 2 & 278 \\\hline 3 & 269 \\\hline 4 & 280 \\\hline 5 & 267 \\\hline 6 & 258 \\\hline 7 & 278 \\\hline 8 & 298 \\\hline 9 & 286 \\\hline 10 & 290 \\\hline\end{array}$$

• A)0.39
• B)0.48
• C)0.57
• D)0.66

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