Forecasts Based on Averages Generally Have What Relation to Actual

question 70

Multiple Choice

Forecasts based on averages generally have what relation to actual demand?

• A)The forecast mirrors demand.
• B)The forecast leads demand.
• C)The forecast lags demand.
• D)The forecast exaggerates forecast error.
• E)The forecast exaggerates variation.

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Definitions:

Credit Instrument Captive Finance Company

refers to a financial subsidiary company operated by a parent company primarily to provide financing for the sales and leasing of their products by offering credit to its customers.

Operating Cycle

The period it takes for a business to buy inventory, sell products, and collect cash from customers, essentially measuring the time between purchasing materials and receiving cash from sales.

Credit Period

The time duration given by a seller to a buyer to pay for a product or service, typically expressed in days.

Inventory Period

The average time that goods remain in inventory before being sold, indicating the efficiency of inventory management.