The current period forecast becomes equal to last period forecast for the value of smoothing constant equal to

Question

Question

This question was previously asked in

BPSC AE Paper 6 (Mechanical) 2012 Official Paper

Answer 1

Explanation:

Forecast value in Smoothing constant method is given by-

F_t = F_t-1 + α [ D_t-1 - F_t-1 ]

where F_t = Current period forecast, F_t-1 = last period forecast, D_t-1 = last period demand, α = smoothing constant

for α = 0

Ft = Ft-1

Hence for α = 0 only the current period forcast becomes equal to last period forecast.

Important Points

For α = 1 current period forecast will become equal to the last period demand.