Question:-
Which one of the following statements is not correct for the exponential smoothing method of demand forecasting ?
Option (A)
Demand for the most recent data is given more weight age
Option (B)
This method requires only the current demand and forecast demand
Option(C)
This method assigns weight to all the previous data
Option(D)
This method gives equal weight age to all the periods
Correct Option:
(D)
Question Solution:
The weight assigned to a previous period’s demand decreases exponentially as that data sets older. Thus recent data receive a higher weight then does older demand data.
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