To select a value for α for exponential smoothing
A)use a small α when the series varies substantially.
B)use a large α when the series has little random variability.
C)use a value between 0 and 1.
D)All of these are correct.

Question

Quizplus · Accepted Answer

All the statements are correct regarding the selection of α (alpha) for exponential smoothing. A small α is used when the series varies substantially to smooth out the fluctuations more, a large α is used when the series has little random variability to respond more quickly to changes, and α must be between 0 and 1 to ensure the model properly weights the observations.

To Select a Value for α for Exponential Smoothing