Table 108
a Manager Wants to Forecast the Monthly Demand
for

question 26

Multiple Choice

Table 10.8
A manager wants to forecast the monthly demand
for a machine the company produces.
$$\begin{array} { | c | c | } \hline \text { Month } & \begin{array} { c } \text { No. Machines } \\\text { Sold }\end{array} \\\hline 1 & 50 \\2 & 65 \\3 & 52 \\4 & 56 \\5 & 55 \\6 & 60 \\\hline\end{array}$$
-Consider the following data concerning the performance of a forecasting method.
$$\begin{array} { | c | c | c | } \hline \text { Month } & \begin{array} { c } \text { Actual } \\\text { Demand }\end{array} & \text { Forecast } \\\hline 1 & 300 & 270 \\2 & 200 & 280 \\3 & 270 & 260 \\4 & 250 & 270 \\5 & 310 & 250 \\\hline\end{array}$$

• A) The CFE is greater than 100, and the MAD is less than 50.
• B) The CFE is less than 100, and the MAD is less than 50.
• C) The CFE is less than 100, and the MAD is greater than 50.
• D) The CFE is greater than 100, and the MAD is greater than 50.

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Definitions:

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The characteristic of a word or expression having an imprecise meaning or unclear boundaries such that uncertainty about precisely what is included in that meaning or excluded from that meaning results in troublesome miscommunications in a given context or for a given purpose.

Problematic Ambiguity

A situation in which a word, phrase, or concept has an unclear or confusing meaning, leading to misunderstanding or difficulty in interpretation.

U.S. Supreme Court

The highest federal court in the United States, with ultimate appellate jurisdiction over all federal and state court cases that involve a point of federal law.

Critical Thinking

The act of examining and judging a matter with the purpose of forming a viewpoint.