What Is an Advantage of the Least Squares Method for Determining

question 20

Multiple Choice

What is an advantage of the least squares method for determining a trend line equation?

• A) It minimizes the error sum of squares.
• B) It is subject to human error.
• C) Forecasts have zero error.
• D) It is easy to calculate by hanD.

---

Definitions:

Accounts Receivable Balance

The aggregate sum of funds that customers owe a company for products or services that have been provided but remain unpaid.

Operating Cycle

The duration of time from the purchase of inventory to the collection of receivables from sales, outlining how long it takes for a company to turn investments in inventory into cash.

Safety Stocks

Additional quantities of stock kept in inventory to reduce the risk of stockouts caused by variations in supply or demand.

Average Inventory

Average Inventory is a calculation used to estimate the value or quantity of inventory that a business holds over a specific period, often used for analyzing inventory efficiency.