Question

If a firm produced a standard item with relatively stable demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be in which of the following ranges?

a. 5 to 10%
b. 20 to 50%
c. 20 to 80%
d. 60 to 120%
e. 90 to 100%

Answer 1

Answer:A. 5 to 10%

Explanation: A smoothing constant is categorised into three the alpha beta and gamma smoothing constants.

The smoothing constant is variable that is used in time series analysis According to exponential smoothing.

The smoothing constants help to determine how the historical series values are weighed.

THE SMOOTHING CONSTANTS ARE USED IN FORCASTING AS THEY HELP TO ENSURE EFFICIENT FORCASTS.