If a firm produced a standard item with relatively stable demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be in which of the following ranges?
A) 5% to 10%
B) 20% to 50%
C) 20% to 80%
D) 60% to 120%
E) 90% to 100%

Question

Quizplus · Accepted Answer

For stable demand, a lower alpha (5% to 10%) is used to give more weight to past data and less to recent changes, reducing the impact of random fluctuations.

If a Firm Produced a Standard Item with Relatively Stable