When using exponential smoothing, if you want the forecast to react quickly to movements in the series, you should choose:
A) values of near 1
B) values of near 0
C) values of midway between 0 and 1
D) the values based on the particular data set

Question

When using exponential smoothing, if you want the forecast to react quickly to movements in the series, you should choose:
A) values of near 1 
B) values of near 0 
C) values of midway between 0 and 1 
D) the values based on the particular data set

Quizplus · Accepted Answer

When using exponential smoothing, the higher the value of the smoothing constant (denoted by alpha), the more weight is given to the most recent observation and the faster the forecast will react to movements within the series. Therefore, values of alpha near 1 (such as 0.9 or 0.95) would allow for a quicker reaction to movements in the series.

When Using Exponential Smoothing, If You Want the Forecast to React