Question: Forecasters at Siegfried Corporation are using simple exponential smoothing to forecast the sales of its major product. They are trying to decide what smoothing constant will give the best results. They have tried a number of smoothing constants with the following results:
Smoothing Constant RMSE
0.10 125
0.15 97
0.20 136
0.25 141
Which smoothing constant appears best from these results? Why? Could you perhaps get even better results given these outcomes? How would you go about improving the RMSE?