Which forecasting technique can place the most emphasis on recent values? How does it do this?

QUESTION:

“Which forecasting technique can place the most emphasis on recent values? How does it do this?”

ANSWER:

Exponential smoothing weighs all previous values with a set of weights that decline exponentially. It can place full weight on the most recent period (with an alpha of 1.0). This, in effect, is the naïve approach, which places all its emphasis on the last period’s actual demand.

 

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