The Morgan Company is interested in developing a forecast for next month's sales.It has collected sales data for the past 12 months.
Assuming that the company plans to use double exponential smoothing with starting values for the smoothed constant process value and smoothed trend value of 98.97 and 13.16 respectively,the MAD value for periods 2-12 is greater when alpha = 0.20 and beta = 0.20 than when alpha = 0.10 and beta = 0.10.

Question

The Morgan Company is interested in developing a forecast for next month's sales.It has collected sales data for the past 12 months.
  Assuming that the company plans to use double exponential smoothing with starting values for the smoothed constant process value and smoothed trend value of 98.97 and 13.16 respectively,the MAD value for periods 2-12 is greater when alpha = 0.20 and beta = 0.20 than when alpha = 0.10 and beta = 0.10.

Quizplus · Accepted Answer

The question states that the MAD value for periods 2-12 is greater when alpha = 0.20 and beta = 0.20 than when alpha = 0.10 and beta = 0.10, indicating that the forecast accuracy is worse for the higher values of alpha and beta. Therefore, the statement is true.

The Morgan Company Is Interested in Developing a Forecast for Next