Someone is making a naïve forecasting if they say, "Oh, it will be almost like today," in response to your question about the weather tomorrow.
Naïve forecasting is a method in which no projections or factor adjustments are made and the previous period's sales are used to forecast the upcoming one. A naïve technique yields predictions that are identical to the final value observed.
Simply plug the previous month's sales into the next available period to get a naïve forecasting. The following equation represents this approach: = (Previous months actual sales) you'll see that the equation predicted a positive percentage within 10% once you've implemented it.
The naïve forecast, which sets the forecast for every future period equal to the value from the current period, is the simplest time series forecasting technique.
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