It Is Now near the End of May and You

question 30

Multiple Choice

It is now near the end of May and you must prepare a forecast for June for a certain product. The forecast for May was 900 units. The actual demand for May was 1,000 units. You are using the exponential smoothing method with α = 0.20. The forecast for June is:

• A) fewer than 925 units.
• B) greater than or equal to 925 units but fewer than 950 units.
• C) greater than or equal to 950 units but fewer than 1,000 units.
• D) greater than or equal to 1,000 units.

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Definitions:

Monopolistic Competitor

A market structure where many companies sell products that are similar but not identical, allowing for competition based on factors other than price.

Short Run

A period in economics where at least one factor of production is fixed, leading to limitations on output adjustments.

Long Run

A period in economics during which all factors of production and costs are variable, allowing for full adjustment to change, such as new technology or market conditions.

Profit

The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes involved in sustaining the activities.