Question: A company is using exponential smoothing when forecasting the demand for a product. The forecast is updated once every week. The smoothing constant for the
A company is using exponential smoothing when forecasting the demand for a product. The forecast is updated once every week.
The smoothing constant for the demand forecast is
and for MAD a smoothing constant equal to is used.
Last week the forecast for the demand were and MAD were
The observed demand during this week is
The supplier lead time is weeks.
Assume that forecast errors during different weeks are independent of each other.
Update the demand forecast and the forecast for MAD and then derive a forecast for the total demand during the next three weeks ie the lead time
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