The exponential smoothing forecasting technique slowly responds to changes in the mean level of demand when A. a small alpha value is used. B. a large alpha value is used. C. an alpha value of 1.0 is used. D. size of the alpha value does not affect the responsiveness.

Question

Kenny Mathews

Business

16 November, 16:40

The exponential smoothing forecasting technique slowly responds to changes in the mean level of demand when A. a small alpha value is used. B. a large alpha value is used. C. an alpha value of 1.0 is used. D. size of the alpha value does not affect the responsiveness.

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Answers (1)

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Immanuel Hale · Answer 1

a small alpha value is used.

Explanation:

The exponential smoothing forecasting technique is used for forecasting a time series when there is no trend or seasonal pattern, but the mean of the time series is slowly changing over time.

The choice of the smoothing constant α (alpha) is important in determining the operating characteristics of exponential smoothing. The smaller the value of α (alpha), the slower the response. Therefore when a small alpha value is used the exponential smoothing forecasting technique slowly responds to changes in the mean level of demand.

When the values of α (alpha) are larger this makes the smoothed value to react quickly - not only to real changes but also random ﬂuctuations.