In a Simple Exponential Smoothing Model, Which of the Following

question 70

Multiple Choice

In a simple exponential smoothing model, which of the following statements is true?

• A) The forecast values are determined by computing a moving average of the previous 4 data periods if we are working with quarterly data.
• B) The larger the smoothing constant, the more smoothing that takes place in the model.
• C) If the data contain a lot of random or irregular ups and downs, then a larger smoothing constant should be used in an attempt to model these fluctuations.
• D) More smoothing of the data will take place if a smoothing constant value close to zero is used.

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Definitions:

Operating Period

The span of time during which a company or a project is expected to operate or carry out its activities.

Break-Even Sales

The amount of revenue required to cover all fixed and variable costs, resulting in a net income of zero.

Operating Period

The time frame during which a business conducts its regular operational activities, usually a fiscal year or quarter.

Divisions

Separate parts or sections of a company, each responsible for certain activities or operations.