As a Consultant, You Have Been Thinking About Choosing the "Right

question 33

Multiple Choice

As a consultant, you have been thinking about choosing the "right" alpha (smoothing constant) for forecasting using exponential smoothing.Which of the following is most accurate about alpha?

• A)If alpha is high, speed of reaction to changes in actually low.
• B)If a firm produces standard product with relatively stable demand, alpha should be small.
• C)Products experiencing growth should be assigned higher alpha value.
• D)Alpha could be more than 1.0, and in this case (1-alpha) will become negative to make up for it.
• E)B and C

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