In order to increase the responsiveness of a forecast made using the moving-average method, the number of values in the average should be:
A) decreased.
B) increased.
C) multiplied by a larger α.
D) multiplied by a smaller α.
E) None of the answer choices is correct.

Question

Quizplus · Accepted Answer

Decreasing the number of values in the average will make the forecast more responsive as it will place greater weight on recent data points. The moving-average method calculates the average of a certain number of past data points to make a forecast. Decreasing the number of data points in the average will reduce the smoothing effect, making the forecast more sensitive to changes in the data.

In Order to Increase the Responsiveness of a Forecast Made