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1.)In exponential smoothing forecast, forecasted sale for period 2 is given by αY1 + (1 –...

1.)In exponential smoothing forecast, forecasted sale for period 2 is given by αY1 + (1 – α) F1......True or FAlse

2.) In exponential smoothing, your goal is to find the α that minimizes mean squared error... True or false

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Answer #1

2. False. Choosing

Alpha no such goal

Values of α close to one have less of a smoothing effect and give greater weight to recent changes in the data, while values of αcloser to zero have a greater smoothing effect and are less responsive to recent changes. There is no formally correct procedure for choosing α. Sometimes the statistician's judgment is used to choose an appropriate factor.

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