To select a value for $\alpha$ for exponential smoothing
A)use a small $\alpha$ when the series varies substantially.
B)use a large $\alpha$ when the series has little random variability.
C)use any value between 0 and 1
D)All of the alternatives are true.

Question

Quizplus · Accepted Answer

Exponential smoothing is a technique used to smooth out a time series by taking a weighted average of past values. The weight given to each past value is determined by the smoothing parameter $\alpha$. A small value of $\alpha$ means that more weight is given to recent values, while a large value of $\alpha$ means that more weight is given to past values.When the series varies substantially, it is better to use a small value of $\alpha$ so that the smoothing process does not over-smooth the data. When the series has little random variability, it is better to use a large value of $\alpha$ so that the smoothing process does not under-smooth the data.

To Select a Value For α\alphaα For Exponential Smoothing A)use a Small

To Select a Value For $\alpha$ For Exponential Smoothing
A)use a Small