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

question 114

Multiple Choice

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

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Definitions:

Constrained Resource

A limited resource in a production process that can restrict the company's ability to produce goods, impact scheduling, and ultimately affect throughput.

Current Profitability

A measure of how much profit a company is generating at the current time, often used to assess financial health.

Constrained Resource

A factor or resource in production that limits the output or performance of a process.

Profitability Order

A method of organizing projects or investments based on their profitability or expected return.