What is the forecast using exponential smoothing with alpha = .6? 2. If we decide to use an alpha of .2 instead of .6, will we be ‘weighting the error from the previous period higher or the Forecast from the previous period higher? Explain briefly or show using math! (In this question I am asking if we change the alpha to a lower alpha, what will be the effect – what will we be ‘weighing’ as more important
The past two years sales at ACSR Inc. were 3 million and 5 million. Their
team used a two-period moving average to forecast its sales this year. But the actual
sales for this year were 5 million. Now, the forecast team wants to forecast its sales for
next year by using exponential smoothing with alpha equals 0.6.
- What is the forecast using exponential smoothing with alpha = .6?
2. If we decide to use an alpha of .2 instead of .6, will we be ‘weighting the error from the previous period higher or the Forecast from the previous
period higher? Explain briefly or show using math!
(In this question I am asking if we change the alpha to a lower alpha, what will be the effect – what will we be ‘weighing’ as more important?)
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