Rental income at the Walsh Real Estate Company for the period February-July has been as follows:

(a) Use exponential smoothing with a = 0.2 and 0.4 to forecast August€™s income. Assume that the initial forecast for February is $78,000.
(b) Which smoothing constant provide a better fore-cast? Justify your answer.
(c) Determine the optimal value of a that minimizes MAPE.

Transcribed Image Text:

MONTH INCOME (THOUSANDS) February March April May June July $83.0 S81.5 S77.8 $84.7 $84.3 $85.8