Question: Consider the following forecasting model: x ^ t,t+ =a ^ t + i=1 i b ^ t with updating procedure a ^ t =x t
Consider the following forecasting model:
x
^
t,t+
=a
^
t
+
i=1
i
b
^
t
with updating procedure
a
^
t
=x
t
+(1)(a
^
t1
+b
^
t1
)
b
^
t
=(a
^
t
a
^
t1
)+(1)b
^
t1
Which of the following statements is true?
Select all correct answers
As
approaches 1, the model output approaches that of an exponential smoothing model with a linear trend.
As
approaches 0, the model output approaches that of a simple exponential smoothing model.
This model allows to predict the demand for any given period in the future based on the forecasteda
andb
values in timet
.
As
approaches 0, the model output approaches that of a cumulative model.
is a dampening parameter for the trend, and it is useful to avoid underforecasting.
None of the above.
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