Using the exponential smoothing model for forecasting, the smoothing constant alpha determines the level of smoothing and
A) the slope of the growth curve.
B) the speed of reaction to differences between forecasts and actual results.
C) the intercept on the Y-axis.
D) the next forecast error.
E) a measure of forecast accuracy.

Question

Quizplus · Accepted Answer

The smoothing constant alpha in exponential smoothing determines how quickly the model reacts to changes in the actual data. A higher alpha gives more weight to recent observations, making the forecast more responsive to changes.

Using the Exponential Smoothing Model for Forecasting, the Smoothing Constant