A smoothing constant of 0.2 will cause the exponential smoothing forecasting technique to react more quickly to a sudden change in historical demand as compared to using a smoothing constant value of 0.7.

Question

Quizplus · Accepted Answer

A higher smoothing constant (like 0.7) causes the exponential smoothing forecast to react more quickly to changes in historical demand, as it gives more weight to the most recent observations compared to a lower smoothing constant (like 0.2).

A Smoothing Constant of 0