Different values of the smoothing constant employed in exponential smoothing cause the smoothing procedure to react more or less rapidly to changes in the value of a series.Which of the following smoothing constants causes the least rapid reaction to a change in the current value of a series?
A) 0.30
B) 0.25
C) 0.15
D) 0.10
E) 0.40

Question

Quizplus · Accepted Answer

The smoothing constant (alpha) in exponential smoothing determines how quickly the model reacts to changes in the series. A lower alpha value means the model reacts more slowly to recent changes, making the forecast more stable but less sensitive to recent changes. Among the given options, 0.10 is the lowest value, causing the least rapid reaction to changes.

Different Values of the Smoothing Constant Employed in Exponential Smoothing