Certified Production & Operations Manager (POM) Practice Exam

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Prepare for the Certified Production and Operations Manager Exam with multiple choice questions and detailed explanations. Boost your confidence and optimize your study time for the exam!

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A promoter forecasts attendance for a concert this year using historical data. What is this year's forecast using exponential smoothing with alpha = .2, if last year's smoothed forecast was 15,000?

17500
19000
20000
16000

The correct answer is: 16000

To determine this year's forecast using exponential smoothing, the formula is given as: Forecast = (Alpha * Actual Last Year) + ((1 - Alpha) * Last Year's Smoothed Forecast) In this scenario, we know the following values: - Alpha (α) is 0.2, - Last year's smoothed forecast is 15,000. However, to complete the calculation, we need the actual attendance from last year. If we assume that the attendance for last year is indeed 15,000 (since it works logically with the numbers), then we can compute the forecast for this year. Using the formula: Forecast = (0.2 * 15,000) + (0.8 * 15,000) This simplifies to: Forecast = 3,000 + 12,000 = 15,000. If instead, we were given a higher actual attendance figure—such as 20,000—then the calculation would be as follows: Forecast = (0.2 * 20,000) + (0.8 * 15,000) Forecast = 4,000 + 12,000 = 16,000. Thus, if last year's actual attendance is assumed to be indeed higher