When using an exponential smoothing constant of 0.85, forecasts tend to:
A) lag behind.
B) overestimate sales at turning points.
C) be identical to naïve forecasts.
D) both a and c are correct.
E) none of the above.

Question

Quizplus · Accepted Answer

A high smoothing constant like 0.85 gives more weight to recent observations, making forecasts more responsive to changes and potentially overestimating sales at turning points.

When Using an Exponential Smoothing Constant of 0