Using exponential smoothing,if we want forecasts to be very responsive to recent demand,the value of alpha should be:
A)Large
B)Moderate
C)Small
D)The value of alpha does not matter.

Question

Quizplus · Accepted Answer

The value of alpha determines the weight applied to the most recent demand observation when making forecasts. A large value of alpha will assign more weight to the most recent observation, making the forecast more responsive to changes in demand. Therefore, if we want forecasts to be very responsive to recent demand, we should choose a large value of alpha.

Using Exponential Smoothing,if We Want Forecasts to Be Very Responsive