A check-processing center uses exponential smoothing to forecast the number of incoming checks each month. The number of checks received in June was 40 million, while the forecast was 42 million. A smoothing constant of .2 is used.
(a) What is the forecast for July?
(b) If the center received 45 million checks in July, what would be the forecast for August?
(c) Why might this be an inappropriate forecasting method for this situation?