Which of the following approaches might be used to determine which value for the smoothing constant to use in a single exponential smoothing model?
A) Select the value that produces the smallest MAD value
B) Select the value that maximizes the MSE
C) Use the value that gives the largest MAD value
D) Use the value that smoothes the data the most

Question

Quizplus · Accepted Answer

The correct approach for determining the smoothing constant in a single exponential smoothing model is to select the value that produces the smallest Mean Absolute Deviation (MAD) value. This method ensures that the chosen constant minimizes the average magnitude of the errors between the forecasted and actual values, leading to more accurate predictions.

Which of the Following Approaches Might Be Used to Determine