2.1 Given the following demand data, use exponential smoothing to forecast the demand in time period 13:

Time 1

2 3

4 5

6 7

8 9

10 11 12 Demand 105 82 111 109 94 99 117 116 103 96 89 103

(a) Use the average over the 12 time periods as the initial estimate (S0) and try different α values (from 0.1 to 0.9 with an increment of 0.1). Which α value gives the best t to the demand data?

(b) Use different values for the initial estimate (e.g., average over the rst 3, 6, and 9 time periods) and reevaluate the α value that gives the best t to the demand data. Is this α value inuenced by the initial estimate?