The forecasting model that uses the constant alpha as an adjustment is the
A)weighted moving average.
B)exponential smoothing.
C)mean absolute deviation.
D)moving average.

Question

Quizplus · Accepted Answer

The forecasting model that uses the constant alpha as an adjustment is called exponential smoothing. Exponential smoothing is a widely used method for forecasting time series data. It works by giving more weight to recent observations and less weight to old observations. This is achieved by using a smoothing parameter (alpha) that determines the weight given to the most recent observation. In other words, exponential smoothing is a type of weighted moving average that uses a constant weight for all observations.

The Forecasting Model That Uses the Constant Alpha as an Adjustment