I am doing a exercise about Exponential smoothing and I would like to know where the 0.8 comes from, please?

I understand that alpha is 0.2 but 0.8 I do now know where that number comes from.

Can you please explain

 

Transcribed Image Text:

C. Month Using Alpha of 0.2, forecast the demand for the months February through September using exponential smoothing, and calculate MAD. Demand Deviation January February March April May June 921 985 854 962 963 799 July August September 875 896 910 Feb-Sept Exponential Smoothing (alpha 0.2) (0.2*921) + (0.8*921) = 921 (0.2*985) + (0.8*921) = 933.8 (0.2*854) + (0.8*933.8) 917.8 = (0.2*962) + (0.8*917.8) = 926.6 (0.2*963) + (0.8*926.6) = 933.9 (0.2 799) + (0.8*933.9) = 906.9 (0.2*896) + (0.8*906.9) = 904.7 (0.2*910)+ (0.8*904.7) = 905.7 985-921 854-933.8 962-917.8 963-926.6 799-933.9 896-906.9 910-904.7 875-905.7 (4 marks) Absolute 64 79.8 44.2 36.4 134.9 10.9 5.3 30.8 C. Month Using Alpha of 0.2, forecast the demand for the months February through September using exponential smoothing, and calculate MAD. Demand Deviation January February March April May June 921 985 854 962 963 799 July August September 875 896 910 Feb-Sept Exponential Smoothing (alpha 0.2) (0.2*921) + (0.8*921) = 921 (0.2*985) + (0.8*921) = 933.8 (0.2*854) + (0.8*933.8) 917.8 = (0.2*962) + (0.8*917.8) = 926.6 (0.2*963) + (0.8*926.6) = 933.9 (0.2 799) + (0.8*933.9) = 906.9 (0.2*896) + (0.8*906.9) = 904.7 (0.2*910)+ (0.8*904.7) = 905.7 985-921 854-933.8 962-917.8 963-926.6 799-933.9 896-906.9 910-904.7 875-905.7 (4 marks) Absolute 64 79.8 44.2 36.4 134.9 10.9 5.3 30.8