When is exponential smoothing equivalent to the "naïve" approach to forecasting?
A) When the smoothing constant is chosen randomly
B) α = 0
C) α = 1
D) α = .5
E) When next month's forecast equals this month's forecast

Question

Quizplus · Accepted Answer

When α=1, exponential smoothing reduces to the "naïve" approach, which simply uses the value from the previous period as the forecast for the next period.

When Is Exponential Smoothing Equivalent to the "Naïve" Approach to Forecasting