Techniques based on averaging include
A) naïve forecasting
B) moving average
C) exponential smoothing
D) A and B only
E) A, B, and C

Question

Quizplus · Accepted Answer

All three techniques, naïve forecasting, moving average, and exponential smoothing, involve averaging past data to make forecasts. Naïve forecasting uses the most recent observation as the forecast for the next period, effectively averaging past data with a heavy weight on the latest observation. Moving average smooths time series data by averaging a number of past observations. Exponential smoothing is a more sophisticated approach that applies decreasing weights to older observations.

Techniques Based on Averaging Include