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

Question

Quizplus · Accepted Answer

The value of alpha controls the weight given to the most recent observation in the smoothing process. A larger value of alpha will place more weight on the most recent observation, making the forecast more sensitive to recent demand. Therefore, if we want forecasts to be very responsive to recent demand, the value of alpha should be large.

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