If a firm produced a standard item with relatively stable demand, the smoothing constant alpha used in an exponential smoothing forecasting model would tend to be in which of the following ranges?
A)5 % to 10 %
B)20 % to 50 %
C)20 % to 80 %
D)60 % to 120 %
E)90 % to 100 %

Question

Quizplus · Accepted Answer

A lower smoothing constant (alpha) like 5% to 10% is used for stable demand to give more weight to past observations and less to recent changes, thus smoothing out fluctuations.

If a Firm Produced a Standard Item with Relatively Stable