Question

which of the following time series forecasting methods would not be used to forecast seasonal data?

dummy variable regression

simple exponential smoothing

time series decomposition

multiplicative Winters method

Answer 1

ANSWER:

Simple Exponential Smoothing cannot be used to forecast seasonal data because simple exponential smoothing does forecast by smoothing the data by removing much of the “noise”( random effect) from the data. And seasonal data is having very less or negligible noise because of increases or decrease at equal intervals. Therefore by using exponential smoothing in seasonal data, we will not get a better forecast. Also, exponential smoothing is a time series forecasting method for univariate data without a trend or seasonality.

Hence the correct answer is Simple Exponential Smoothing.