Question 8)

A manager wants to use exponential smoothing to forecast the demand for the next month. The following table provides the forecast errors for the past 6 months using different values of a, where a is the smoothing constant. Which a should he use? Error (Actual demand-Forecast demand) Month a=0.3 a=0.4 a=0.5 a=0.6 a=0.7 1 -8 6 -3 7 1 2 7 9 10 0 3 9 -9 -6 5 4 -3 10 4 2 | 1408 5 1 0 7 -9 6 10 -5 7 0 A. a=0.4 B. a=0.5 O C. a=0.6 D. a=0.3 E. a=0.7