Marie Bain Is the Production Manager at a Company That

Essay

Marie Bain is the production manager at a company that manufactures hot water heaters. Marie needs a demand forecast for the next few years to help decide whether to add new production capacity. The company's sales history (in thousands of units) is shown in the table below. Use exponential smoothing with trend adjustment, to forecast demand for period 6. The initial forecast for period 1 was 11 units; the initial estimate of trend was 0. The smoothing constants are α = .3 and β = .3
$$\begin{array} { | c | c | } \hline \text { Period } & \text { Actual } \\\hline 1 & 12 \\\hline 2 & 15 \\\hline 3 & 16 \\\hline 4 & 16 \\\hline 5 & 18 \\\hline 6 & 20 \\\hline\end{array}$$