Increasing the value of alpha (α)in an exponential smoothing model would produce which of the following results?
A)Reduce the influence of more recent demands in computing future forecasts
B)Reduce the amount of data that needs to be stored to support the forecasting process
C)Increase the sensitivity of the forecast process to recent changes in demand
D)Reduce the ability of the forecast process to respond to seasonality in demand

Question

Quizplus · Accepted Answer

Increasing the value of alpha (α) in an exponential smoothing model would increase the sensitivity of the forecast process to recent changes in demand. This is because the higher value of alpha would put more weight on the most recent demand values in computing the forecast.

Increasing the Value of Alpha (α)In an Exponential Smoothing Model