Question

The table below shows the lbs of ice cream sold at a local ice cream parlor for the previous 10 weeks. Assume you are helping the owner develop a weekly forecasting model.

Week	lbs of ice cream
1	110
2	122
3	108
4	110
5	121
6	114
7	103
8	112
9	117
10	108

Find the FIT for week 7, using an exponential smoothing with trend model, for the data using alpha of 0.2 along with a delta (δ) of 0.1. Assume an initial trend value (T₁) of 1 and an initial forecast (F₁) of 105.

Answer 1

Instead of beta, consider delta

For Period 2:

F = 110 + 0.2*(110-105) = 106.00

T = 1 + 0.1*(106 - 105 - 1) = 1.00

TAF = 106 + 1 = 107

Period	Actual	F	T	TAF
1	110	105.00	1.00
2	122	106.00	1.00	107.00
3	108	109.20	1.22	110.42
4	110	108.96	1.07	110.03
5	121	109.17	0.99	110.16
6	114	111.53	1.13	112.66
7	103	112.03	1.06	113.09
8	112	110.22	0.78	111.00
9	117	110.58	0.73	111.31
10	108	111.86	0.79	112.65

For period 7, TAF = 113.09