The naive forecast can serve as a standard of comparison against which to judge the cost and accuracy of other techniques.

Question

Quizplus · Accepted Answer

This statement is true. The naive forecast, which assumes that future values will be equal to the last observed value or the average of past values, can be used as a benchmark to evaluate the performance of other forecasting methods. Forecasting techniques that have higher accuracy and lower cost than the naive forecast are generally preferred.

The Naive Forecast Can Serve as a Standard of Comparison