Question

When an increasing trend exists in the data and a single exponential smoothing forecast method is used, the forecast will:_______.
a) predict demand perfectly
b) generally underestimate demand
c) capture the trend
d) increase the trend
e) none of the above

Answer 1

Answer:

c) capture the trend

Explanation:

The exponential smoothing is a forecasting method that is used for a time series and the data i.e. univariate. It could be extended for data support that have the chronological trend

Here in the given situation, if the trend i.e. increased in the data and the above method is used so in the case when the value of the alpha is more it would capture the trend but in the case when the value of the alpha is less so it also capture the demand but the demand is underestimated

Hence, the option c is correct

Answer 2

The exponential smoothing method is a time series forecasting method of the univariate data that is extended to support systematic trends and seasonal components.

• his method is used when some trends may be present, weight-based on experimental and intuition and orderly data is less important.

• The single parameter controls the rate at which the pbservatiosna are influenced.  While the double method is an extension of smoothing that adds support for trends in time series.

Hence the option D is correct.

Learn more about the increasing trend that exists in the data and a single exponential smoothing.

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