Which of the following is true of the exponential smoothing method?
A) It does not incorporate new observations into existing forecasts.
B) It weighs all recent observations equally.
C) It assigns weights that decrease exponentially as observations gets older.
D) It does not use all available observations in making a forecast.

Question

Quizplus · Accepted Answer

Exponential smoothing method assigns weights that decrease exponentially as observations get older. This means that recent observations are given more weight than older observations, and new observations are incorporated into existing forecasts. Option A and D are incorrect, as exponential smoothing method does incorporate new observations and uses all available observations in making a forecast. Option B is also incorrect, as all recent observations are not given equal weight.

Which of the Following Is True of the Exponential Smoothing