New forecast = [(α *latest observation)+((1 - α)* old forecast)] is the formula for ______.
A)moving average
B)weighted moving average
C)exponential smoothing
D)factor rating method

Question

Quizplus · Accepted Answer

The formula given is for exponential smoothing, which is a time-series forecasting method that gives more weight to the most recent observations while gradually decreasing the weight of older observations. The parameter α is the smoothing coefficient, which determines the rate at which the weights decrease. The other options (moving average, weighted moving average, factor rating method) use different formulas to calculate forecasts.

New Forecast = [(α *Latest Observation)+((1 - α)* Old Forecast)]

New Forecast = [(α Latest Observation)+((1 - α) Old Forecast)]