A management analyst is using exponential smoothing to predict merchandise returns at an upscale branch of a department store chain
Given an actual number of returns of 154 items in the most recent period completed, a forecast of 172 items for that period, and a smoothing constant of 0.3, what is the forecast for the next period? How would the forecast be changed if the smoothing constant were 0.6? Explain the difference in terms of alpha and responsiveness.
166.6; 161.2 The larger the smoothing constant in an exponentially smoothed forecast, the more responsive the forecast.
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