The exponential smoothing model produces a naïve forecast when the smoothing constant,α,is equal to
A)0.00.
B)1.00.
C)0.50.
D)2.00

Question

Quizplus · Accepted Answer

When the smoothing constant, α, is equal to 1.00, it means that the forecast for the next period is based solely on the actual value of the current period, making it a naïve forecast. Therefore, the best choice for producing a naïve forecast using the exponential smoothing model is when α=1.00.

The Exponential Smoothing Model Produces a Naïve Forecast When the Smoothing