It Is Important to Question the Reliability of Forecasts Because

question 103

Multiple Choice

It is important to question the reliability of forecasts because

• A) if predictions are too low, a company like Motel 6 might build too many units and thus have a surplus of capacity.
• B) uncertainty is black and white, and therefore the gray areas are unimportant.
• C) underestimating uncertainty can lead to good competitive strategies.
• D) the growth new industries, such as that of telecommunications, cannot be predicted.

---

Definitions:

Probability

An assessment of an event's chances of occurring, measured as a value from 0 to 1.

Random

Referring to an event or selection process that has no specific pattern, order, or aim, and is governed by chance.

First Serves

In tennis, the initial serves in a game where the server has two opportunities (first and second serve) to successfully start a point.

Independent Events

Events in probability where the outcome of one event does not affect the outcome of another.