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:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.