A Direct Forecast Involves Estimating the Value to Be Forecast

question 23

Multiple Choice

A direct forecast involves estimating the value to be forecast and

• A) making decisions without any intervening steps.
• B) halving the highest values and doubling the lowest values to determine an acceptable forecast range.
• C) selecting the alternative that holds the greatest consensus within the management team.
• D) then conducting a sensitivity analysis to determine price elasticity.
• E) selecting the forecasting alternative that would allow a firm to survive financially even if the forecasts are incorrect.

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Definitions:

Industry Supply Curve

A graphical representation that shows the quantity of goods that producers are willing and able to sell at different price levels in a specific industry.

Variable Costs

Costs that vary directly with the level of production, such as materials and labor.

Long Run

A period of time in economics during which all factors of production and costs are variable.

Apple Orchard

An agricultural area dedicated to the cultivation of apple trees for the purpose of producing apples.