The Wilson Company is interested in forecasting demand for its XG-667 product for quarter 13 based on 12 quarters of data. The following shows the data and the double exponential smoothing model results for periods 1-12 using alpha = 0.20 and beta = 0.40. Based on this information, which of the following statements is true?
A) If beta is changed to 0.20 and alpha remains at 0.20, the MAD for periods 2-12 is reduced.
B) If beta is changed to 0.20 and alpha remains at 0.20, the forecast for period 13 is slightly reduced.
C) The forecast bias for periods 2-12 is approximately 6.18.
D) All of the above are true.

Question

The Wilson Company is interested in forecasting demand for its XG-667 product for quarter 13 based on 12 quarters of data. The following shows the data and the double exponential smoothing model results for periods 1-12 using alpha = 0.20 and beta = 0.40.  Based on this information, which of the following statements is true?
A) If beta is changed to 0.20 and alpha remains at 0.20, the MAD for periods 2-12 is reduced. 
B) If beta is changed to 0.20 and alpha remains at 0.20, the forecast for period 13 is slightly reduced. 
C) The forecast bias for periods 2-12 is approximately 6.18. 
D) All of the above are true.

Quizplus · Accepted Answer

The Answer of The Wilson Company is interested in forecasting demand for its XG-667 product for quarter 13 based on 12 quarters of data. The following shows the data and the double exponential smoothing model results for periods 1-12 using alpha = 0.20 and beta = 0.40.  Based on this information, which of the following statements is true?
A) If beta is changed to 0.20 and alpha remains at 0.20, the MAD for periods 2-12 is reduced. 
B) If beta is changed to 0.20 and alpha remains at 0.20, the forecast for period 13 is slightly reduced. 
C) The forecast bias for periods 2-12 is approximately 6.18. 
D) All of the above are true.

The Wilson Company Is Interested in Forecasting Demand for Its