Assume That a Time-Series Forecast Is Generated for Future Demand

question 85

Multiple Choice

Assume that a time-series forecast is generated for future demand and subsequently it is observed that the forecast method did not accurately predict the actual demand.Specifically,the forecast errors were found to be: Mean absolute percent error = 10%
Cumulative sum of forecast errors = 0
Which one of the statements concerning this forecast is TRUE?

• A)The forecast has no bias but has a positive standard deviation of errors.
• B)The forecast has a positive bias and a standard deviation of errors equal to zero.
• C)The forecast has no bias and has a standard deviation of errors equal to zero.
• D)The forecast has a positive bias and a positive standard deviation of errors.

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual price they receive, representing economic gain.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product or service.

Maximize Profit

To maximize profit, a firm seeks to increase the difference between its total revenues and total costs through optimal pricing strategies and efficient production.

Marginal Cost

Marginal cost represents the increase or decrease in the total cost of production when the quantity produced is incremented by one unit.