Certified Production & Operations Manager (POM) Practice Exam

Exponential smoothing is a form of weighted averaging. True or False?

1. True

2. False

3. Not applicable

4. Both True and False

The correct answer is: True

Exponential smoothing is indeed a form of weighted averaging, where past observations are given exponentially decreasing weights. This means that more recent data points are weighted more heavily than older ones, allowing for a dynamic response to changes in the data. The essence of exponential smoothing is its ability to adapt to new information while still considering previous data, which inherently makes it a variant of weighted averaging. In this method, the weight does not decrease linearly but rather exponentially, allowing the model to respond more vigorously to recent trends or shifts in the data. This characteristic is what distinguishes exponential smoothing from other forms of averaging, making it particularly useful for forecasting in many production and operational contexts. The other options do not reflect the correct application of exponential smoothing. Therefore, regarding the true nature of exponential smoothing as a weighted averaging technique, the statement is accurate.