Answer to Question #304106 in Management for avinash

Question

The table mentioned below shows the “Gross Production of Energy by Two Sources in India from 2010-11 to 2015-16”. Adopt Exponential Smoothing Method. Consider the Alpha (α) values 0.2, 0.5, 0.7 and find out the one that is comparatively good for the prediction. 

Forecast the value for year 2016-17. Year Coal - (Million Tones) Lignite - (Million Tones) 2010-11 532.7 37.73 2011-12 539.95 42.33 2012-13 556.4 46.45 2013-14 565.77 44.27 2014-15 609.18 48.27 2015-16 639.23 43.84

Source: Open Government Data (OGD) Platform India

Answer 1

Alpha value 0.7 is a high value for alpha, which tracks the data more closely by giving more weight to recent data results in the smallest MSE. This way it is most preferable.

The forecast for year 2016-2017 is 447.46 and 30.69 respectively.