For last period's forecast of 65 and last period's demand of 62, what is the simple exponential smoothing forecast with an alpha of .4?

To calculate the simple exponential smoothing forecast, you use the formula:

New Forecast = Alpha * Last Period's Demand + (1 - Alpha) * Last Period's Forecast

In this case, the last period's forecast is 65, the last period's demand is 62, and the alpha is 0.4. Plugging in these values:

New Forecast = 0.4 * 62 + (1 - 0.4) * 65

First, calculate each component:

1. 0.4 * 62 = 24.8
2. (1 - 0.4) = 0.6, so 0.6 * 65 = 39.0

Now, add these two results together:

New Forecast = 24.8 + 39.0 = 63.8

This calculation shows that the new forecast, based on the given parameters, is indeed 63.8. Thus, the correct choice is the one indicating 63.8, which effectively captures the influence of both past demand and past forecasts adjusted by the smoothing constant (alpha).