If single exponential smoothing is used and the time series has a negative trend, the forecast will
A)Lag
B)Overshoot
C)Be on target
D)Have a MAD equal to zero

Question

Quizplus · Accepted Answer

Single exponential smoothing is designed to work with time series data that follows a stationary or stable trend. If the time series has a negative trend, the forecast generated by single exponential smoothing will likely overshoot the actual values. This is because the method assumes that the trend will continue at the same pace, but in reality, the trend is decreasing. Therefore, option B is the correct answer, as the forecast will overshoot the actual values.

If Single Exponential Smoothing Is Used and the Time Series