Four Types of Forecast Error Measures Can Be Used

question 6

Multiple Choice

Four types of forecast error measures can be used. Which one of the following is not one of the four types?

• A) cumulative sum of forecast errors
• B) exponential smoothing for trends
• C) mean squared error
• D) mean absolute deviation

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Definitions:

Demand Shift

A change in the overall demand for a good or service due to factors like consumer preferences, incomes, prices of related goods, or population changes, leading to a new demand curve.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in a market balance.

Substitute

A product or service that can be used in place of another to satisfy similar needs or demands.

Industry Entry

The process of a new competitor or business entering into a market or industry.