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GATE 2016 ME (ME3) – Question 64

Production Planning and Control · Forecasting models · 2 marks · Multiple choice

The demand for a two-wheeler was 900 units and 1030 units in April 2015 and May 2015, respectively. The forecast for the month of April 2015 was 850 units. Considering a smoothing constant of 0.6, the forecast for the month of June 2015 is

  1. 850 units
  2. 927 units
  3. 965 units
  4. 970 units

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Correct answer: (D) 970 units

Explanation

Use F_next=αD_current+(1−α)F_current withα=0.6. The May forecast is0.6×900+0.4×850=880. The June forecast is0.6×1030+0.4×880=**970units, D**. Both updates are needed from the supplied April forecast.