The Wilson Company Is Interested in Forecasting Demand for Its

question 49

Multiple Choice

The Wilson Company is interested in forecasting demand for its XG-667 product for quarter 13 based on 12 quarters of data. The following shows the data and the double exponential smoothing model results for periods 1-12 using alpha = 0.20 and beta = 0.40. Based on this information, which of the following statements is true?

• A) If beta is changed to 0.20 and alpha remains at 0.20, the MAD for periods 2-12 is reduced.
• B) If beta is changed to 0.20 and alpha remains at 0.20, the forecast for period 13 is slightly reduced.
• C) The forecast bias for periods 2-12 is approximately 6.18.
• D) All of the above are true.

---

Definitions:

Dividend

A portion of a company's earnings distributed to its shareholders, usually in the form of cash payments or additional shares.

Inflation

The rate at which the general level of prices for goods and services is rising.

Holding-Period Return

The total return received from holding an asset or portfolio of assets over a period of time, considering both price appreciation and dividends or interest.