As alpha increases the exponential smoothing model
A) produces sluggish forecasts.
B) reacts quickly to changes in the data.
C) reacts slowly to changes in the data.
D) does not change.

Question

Quizplus · Accepted Answer

An increase in the alpha value in an exponential smoothing model makes the forecasts more responsive to recent changes in the data, meaning it reacts more quickly to these changes.

As Alpha Increases the Exponential Smoothing Model