Which One of the Following Is Most Useful for Measuring

question 4

Multiple Choice

Which one of the following is most useful for measuring the bias in a forecast?

• A) cumulative sum of forecast errors
• B) standard deviation of forecast errors
• C) percentage forecast error in period t
• D) mean absolute deviation of forecast errors

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Definitions:

Common Causes

Variations in a process that are random and inherent as a natural part of the process.

Special Causes

Unusual sources of variation in a process that are not part of the process as it was designed and generally need to be identified and eliminated.

Statistical Process Control

A method of quality control which employs statistical methods to monitor and control a process, helping ensure that the process operates at its fullest potential.

Variation

The measure of dispersion in a dataset, showing how much individual data points differ from the mean.