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Table 11.1. -Use the Information in Table 11.1. Your Boss Has Asked

question 151

Multiple Choice

Table 11.1.

-Use the information in Table 11.1. Your boss has asked you to find a good technique to forecast short- term demand for an important product. You have decided to test the following four techniques against the historical data already given:
-Three- month simple moving average -Three- month weighted moving average, with weight of 0.6 for the most recent month, 0.3 for the second- most- recent month, and 0.1 for the third- most- recent month
-Three- month weighted moving average, with weights of 0.5 for the most recent month, 0.3 for the second- most- recent month, and 0.2 for the third- most- recent month
-Exponential smoothing (a = 0.3 and the forecast for March was 55)
Use each of the four techniques to forecast April through August, and then use the five months of forecasts to calculate MAD. Round all forecasts to the nearest whole number just before doing your MAD calculations. Which of the four techniques is best in terms of MAD?

Analyze how changes in the market influence consumer behavior and producer responses.

Comprehend how external factors such as news reports, and changes in consumer income or prices of related goods can influence market dynamics.

Apply the concept of market demand to real-world examples.

Distinguish between competitive markets and how market power affects price and quantity.

Definitions:

A category within the money supply that includes physical currency and coin, demand deposits, traveler's checks, and other checkable deposits.

Savings Deposits

Accounts held at financial institutions that earn interest while providing funds liquidity with few, if any, restrictions on withdrawals.

Demand Deposits

Bank accounts from which money can be withdrawn at any time without any advance notice.

A category of the money supply that includes all physical money like coins and currency, as well as demand deposits, and other liquid assets quickly convertible to cash.