In 2004, the Board of Control of Public Schools Hired

Essay

In 2004, the Board of Control of Public Schools hired a consultant to develop a series of forecasting models to project the future enrollments of each school in the district. After examining the historical data and trends, the consulting firm felt that exponential smoothing would be the most appropriate time series technique for projecting enrollment. An exponential smoothing model was then developed. The Board members determined the alpha level (smoothing constant) for each school based on their gut feeling. The forecast enrollments helped the board set the budget for each school for the upcoming year. Based on the above situation, discuss the pros and cons of using the exponential smoothing technique for this forecasting purpose. How can the model be abused? What could the board do to improve the accuracy of enrollment information?