Suppose That You Are Using Exponential Smoothing with 

question 89

Multiple Choice

Suppose that you are using exponential smoothing with  = 0.5 and your initial forecast 5 months ago was for 100 units. If the actual demand last month was 0 units, which of the following is definitely true?

• A) The forecast for this month should be 0.
• B) The model blew up. You can't use exponential smoothing anymore.
• C) The forecast for last month was 0.
• D) The forecast for this month should be 50.
• E) We need more information to determine this month's forecast.

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