If a Firm Produced a Product That Was Experiencing Growth

question 68

Multiple Choice

If a firm produced a product that was experiencing growth in demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be which of the following?

• A) Close to zero.
• B) A very low percentage, less than 10%.
• C) The more rapid the growth, the higher the percentage.
• D) The more rapid the growth, the lower the percentage.
• E) 50% or more.

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Definitions:

Operating Segments

Components of a business that engage in business activities earning revenues and incurring expenses, whose operating results are regularly reviewed by the company's decision maker.

Revenues

The total amount of income generated by the sale of goods or services related to a company's primary operations before any costs or expenses are deducted.

Operating Segments

Operating segments refer to components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Identifying Factors

Elements or characteristics that can be used to recognize, classify, or differentiate between different subjects or objects.