Question

Resolve Problem 4.19 with α = .1 and β = .8. Using MSE, determine which smoothing constants provide a better forecast.
In Problem 4.19, Income at the law firm Smith and Wesson for the period February to July was as follows:


Use trend-adjusted exponential smoothing to forecast the law firm’s August income. Assume that the initial forecast for February is $65,000 and the initial trend adjustment is 0. The smoothing constants selected are α = .1 and β =.2.


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  • CreatedJuly 15, 2013
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