A method that uses a weighted average of past values for arriving at smoothed time series values is known as ______.
A) regression analysis
B) deseasonalization
C) decomposition
D) exponential smoothing

Question

Quizplus · Accepted Answer

Exponential smoothing is a smoothing technique that uses a weighted average of past observations, with the weights decreasing exponentially as the observations get older. It is commonly used in time series forecasting to remove random fluctuations (noise) and reveal underlying trends and patterns. The idea is that more recent observations are more relevant in predicting future values, and thus should be given more weight in the smoothing process.

A Method That Uses a Weighted Average of Past Values