You Are Hired as a Consultant to Advise a Small

question 52

Multiple Choice

You are hired as a consultant to advise a small firm on forecasting methodology. Based on your research, you find the company has a MAD of 3. It wants to have a 99.7 percent control limits on its forecasting system. Its most recent tracking signal value is 15. What should be your report to the company?

• A) The forecasting model is operating acceptably.
• B) The forecasting model is out of control and needs to be corrected.
• C) The MAD value is incorrect.
• D) The upper control value is less than 20.
• E) The company is using an inappropriate forecasting methodology.

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Definitions:

Theoretical Foundation

The fundamental principles and assumptions that form the basis for a particular theory or field of study.

ERG Theory

A theory proposed by Clayton Alderfer that categorizes human needs into three groups: Existence, Relatedness, and Growth, modifying Maslow's hierarchy of needs.

Maslow's Needs

A theory of psychological development outlined by Abraham Maslow that proposes a hierarchy of human needs, from basic physiological needs to self-actualization.

Human Motivation

The internal drive that propels individuals to take action, achieve goals, and satisfy needs and desires.