Generally speaking, firms use exponential smoothing constants that fall between 0.05 and 0.5. The higher the constant, the more weight your forecast gives to the actual demand data from the preceding period. A constant of 0.05 would give minimal weight to the preceding period. A constant of 1.0 would yield the same result as a naive forecast, because it would include the entire demand (100 percent) and none of the latest forecast amount (0 percent).

Which of the following smoothing constants would yield the same result as a naive forecast?    
 A. 0  
 B. 0.05  
 C. 0.50  
 D. 1.0

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D 10 Explanation A smoothing constant o... View the full answer