Use the data given below to answer the following question(s) .
The table below shows the sales of a gaming console for the first 6 months of the year 2011.
The forecaster uses the weighted average model to determine the forecasts.He assumes a 40% weight for the most recent reading,30% weight for the second most recent reading,20% for the third most recent reading,and 10% for the fourth most recent reading.
-The value of α in the simple exponential smoothing model F_t_{+ 1} = (1 - α) F_t + αA_t lies between ________.

Question

Use the data given below to answer the following question(s) .
The table below shows the sales of a gaming console for the first 6 months of the year 2011.
The forecaster uses the weighted average model to determine the forecasts.He assumes a 40% weight for the most recent reading,30% weight for the second most recent reading,20% for the third most recent reading,and 10% for the fourth most recent reading.

-The value of α in the simple exponential smoothing model F_t_{+ 1} = (1 - α) F_t + αA_t lies between ________.

Quizplus · Accepted Answer

The weighted average model uses a scale of weights that add up to 100%. Thus, to calculate the forecast for a particular month, the most recent reading is multiplied by 0.4, the second-most recent by 0.3, the third-most recent by 0.2, and the fourth-most recent by 0.1, and the sum of these values is the forecast.

For the simple exponential smoothing model, the value of alpha lies between 0 and 1. This is because alpha represents the weight given to the most recent observation, and it must be a value between 0 and 1 to ensure that the forecast remains within the range of the data.

Use the Data Given Below to Answer the Following Question(s)