Assume That a Time-Series Forecast Is Generated for Future Demand

question 29

Multiple Choice

Assume that a time-series forecast is generated for future demand and subsequently it is observed that the forecast method did not accurately predict the actual demand. Specifically, the forecast errors were found to be: Mean absolute percent error = 10%
Cumulative sum of forecast errors = 0
Which one of the statements concerning this forecast is True?

• A) The forecast has no bias but has a positive standard deviation of errors.
• B) The forecast has a positive bias and a standard deviation of errors equal to zero.
• C) The forecast has no bias and has a standard deviation of errors equal to zero.
• D) The forecast has a positive bias and a positive standard deviation of errors.

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Definitions:

Common Parent Corporation

The umbrella corporation in a conglomerate or group of companies that controls subsidiary companies.

Newly-formed Corporation

A business entity that has been recently established and registered as a corporation, initiating its legal and operational activities.

Debt

Money owed by one party to another under conditions that require repayment, often including interest.

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The total amount of tax owed to tax authorities after all credits and deductions have been applied to gross income.