Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast?
A) 0
B) 1 divided by the number of periods
C) 0.5
D) 1.0
E) cannot be determined

Question

Quizplus · Accepted Answer

A naive forecast simply uses the last observed value as the forecast for the next period. An exponential smoothing forecast with a smoothing constant (alpha) of 1.0 would give the full weight to the most recent observation, effectively making it the same as a naive forecast.

Which of the Following Smoothing Constants Would Make an Exponential