1. Homework Solution Weighted Averages - Exponential Smoothing - Trend
MGMT E-5070
Homework Solution Weighted Averages - Exponential Smoothing - Trend
Cool-Man Air Conditioners TM
Manual
Computer-Based
Part A

2. Cool-Man Air Conditioners
Sales of Cool-Man air conditioners have grown steadily over the
past five years:
Year
Sales
1st
450
2nd
495
3rd
518
4th
563
5th
584
6th ?

3. Cool-Man Air Conditioners
REQUIREMENT:
The sales manager had predicted, before the
business started, that year 1’s sales would be
410 units.
Using exponential smoothing with a weight of
α = 0.30, develop forecasts for years 2 through
6 .

4. Cool-Man Air Conditioner
Exponential Smoothing
2nd Year st Year st Year 1st Year
Forecast = Forecast α ( Actual - Forecast )
= units ( 450 units units )
= units ( 40 units )
= units units
= units

5. Cool-Man Air Conditioner
Exponential Smoothing
3rd Year nd Year nd Year 2nd Year
Forecast = Forecast α ( Actual - Forecast )
= units ( 495 units units )
= units ( 73 )
= units units
= units

6. Cool-Man Air Conditioner
Exponential Smoothing
4th Year rd Year rd Year 3rd Year
Forecast = Forecast α ( Actual - Forecast )
= units ( 518 units units )
= units ( 74.1 )
= units units
= units

7. Cool-Man Air Conditioner
Exponential Smoothing
5th Year th Year th Year th Year
Forecast = Forecast α ( Actual - Forecast )
= units ( 563 units units )
= units ( )
= units units
= units

8. Cool-Man Air Conditioner
Exponential Smoothing
6th Year th Year th Year th Year
Forecast = Forecast α ( Actual - Forecast )
= units ( 584 units units )
= units ( 88.8 )
= units units
= units

9. Cool-Man Air Conditioners
REQUIREMENT:
Using the smoothing coefficients of 0.60 and
0.90, develop forecasts for the sales of Cool-
Man air conditioners.

10. Cool-Man Air Conditioners
Smoothing coefficient ( α ) = 0.60
Year
Sales
Forecast
1st
450 -
2nd
495
434
3rd
518
470.6
4th
563
499.0
5th
584
537.4
6th ?
565.6

11. Cool-Man Air Conditioners
Smoothing coefficient ( α ) = 0.90
Year
Sales
Forecast
1st
450 -
2nd
495
446
3rd
518
490.10
4th
563
515.21
5th
584
558.20
6th ?
581.40

12. Homework Solution Weighted Averages - Exponential Smoothing - Trend
Cool-Man Air Conditioners TM
Manual
Computer-Based
Part A