Explain how error measures can help to optimize moving averages, weighted moving averages, and exponential smoothing methods.

The error measures are Mean Absolute Deviation(MAD), Mean Square Error, Mean Absolute percentage Error (MAPE) . The error measure technique that provides least measure of error is considered as the suitable technique.

Explanation:

Error measures are known as error of observation. It can be random or systematic. The weighted moving averages are done by putting more weight on recent data and less on past data. It is proved by multiplying each price by weighting factor.

The Exponential smoothing technique uses smoothing constant as a predictor for future forecasting. Whenever we use the number as average in forecasting then it is smoothed.