Question: e. FITCO would also like to do some forecasting to see if their sales are heading in the right direction. Of course, the company's preferred
e. FITCO would also like to do some forecasting to see if their sales are heading in the right direction. Of course, the company's preferred forecasting method is FIT (Forecast including Trend). A forecast including trend was made last moth that predicted 112 units would be sold this month, with a trend estimate of 11 units. The actual number of units sold this month turned out to be 115. Management would like to see at least 125 units sold next month, if we use an alpha of 0.2 and a delta of 0.3, does the FIT for next month support this goal? Show why or why not. Ft = FITt-1 + (At-1 - FITt-1) Tt = Tt-1 + (Ft - FITt-1) FITt = Ft + Tt Where Ft = forecast that does not include trend for period t Tt = trend for period t FITt = forecast including trend for period t FITt-1 = forecast including trend for period t-1 At-1 = actual demand for period t-1 , = smoothing constants
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