The Wilson Company Is Interested in Forecasting Demand for Its

question 8

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.

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Definitions:

Process Costing

A costing method used in manufacturing where costs are assigned to processes or departments, suitable for continuous production environments.

Ending Work In Process

The value of partially completed goods at the end of an accounting period, in production but not yet finished.

FIFO Method

An inventory valuation method that assumes the items purchased or produced first are sold first, thus the remaining inventory consists of items acquired most recently.

Beginning Work In Process

The inventory of partially completed goods at the start of an accounting period.