In the exponential smoothing method, which one of the following is true?

0 ≤ α ≤ 1 and high value of α is used for stable demand
0 ≤ α ≤ 1 and high value of α is used for unstable demand
α ≥ 1 and high value of α is used for stable demand
α ≤ 0 and high value of α is used for unstable demand

Correct answer: 0 ≤ α ≤ 1 and high value of α is used for unstable demand

Solution

In exponential smoothing, the smoothing constant \(\alpha\) lies between 0 and 1. A higher value of \(\alpha\) makes the forecast more responsive, which is useful for unstable or rapidly changing demand.

Related GATE Technical questions

The time-series forecasting method that gives equal weightage to each of the \(m\) most recent observations is
In a linear programming problem, if a resource is not fully utilized, the shadow price of that resource is
A factory produces \(m\) products \((i=1,2,\dots,m)\), each of which requires processing on \(n\) workstations \((j=1,2,\dots,n)\). Let \(a_{ij}\) be the processing time that one unit of the \(i^{\text{th}}\) product requires on the \(j^{\text{th}}\) workstation. Let the revenue from selling one unit of the \(i^{\text{th}}\) product be \(r_i\), and let \(h_i\) be the holding cost per unit per time period for the \(i^{\text{th}}\) product. The planning horizon consists of \(T\) time periods \((t=1,2,\dots,T)\). The minimum demand that must be satisfied in time period \(t\) is \(d_{it}\), and the capacity of the \(j^{\text{th}}\) workstation in time period \(t\) is \(c_{jt}\). Consider the aggregate planning formulation below, with decision variables \(S_{it}\) (amount of product \(i\) sold in time period \(t\)), \(X_{it}\) (amount of product \(i\) manufactured in time period \(t\)), and \(I_{it}\) (amount of product \(i\) held in inventory at the end of time period \(t\)). \[ \max \sum_{t=1}^{T}\sum_{i=1}^{m}(r_iS_{it}-h_iI_{it}) \] subject to \[ S_{it}\ge d_{it}\quad \forall i,t \] The capacity constraints and inventory balance constraints for this formulation are
The demand and forecast of an item for five months are given in the table. Month | Demand | Forecast April | 225 | 200 May | 220 | 240
Parts P1–P7 are machined first on a milling machine and then polished at a separate machine. Using the information in the following table, the minimum total completion time required for carrying out both operations for all 7 parts is ________ hours. Part | Milling (hours) | Polishing (hours) P1 | 8 | 6 P2 | 3 | 2 P3 | 3 | 4 P4 | 4 | 6 P5 | 5 | 7 P6 | 6 | 4 P7 | 2 | 1
The net requirements of an item over 5 consecutive weeks are 50, 0, 15, 20, 20. The inventory carrying cost is Re. 1 per item per week and the ordering cost is Rs. 100 per order. Starting inventory is zero. Using the Least Unit Cost Technique, the cost of the plan (in Rs.) is

⚔️ Practice GATE Technical free + battle 1v1 →