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Unformatted text preview: For example: Lets say that we start out in Month 1 with an actual demand (At) of 12, a smoothed forecast (Ft) of 11, a smoothed trend (Tt) of 2, and a forecast including trend (FITt) of 13. What is the forecast for Month 2, assuming an alpha of 0.2 and a beta of 0.4? First, we calculate the exponentially smoothed forecast for Month 2: Ft = (0.2)(12) + (1  0.2)(11 + 2) = 2.4 + 10.4 = 12.8 Next, we calculate the exponentially smoothed trend for Month 2: Tt = (0.4)(12.8 11) + (1 0.4)(2) = .72 + 1.2 = 1.92 Finally, we add the exponentially smoothed forecast (Ft) to the exponentially smoothed trend (Tt): FITt = (12.8) + (1.92) = 14.72 units...
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 Spring '08
 BENSON

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