The Focus of Smoothing Methods Is to Smooth

question 45

Multiple Choice

The focus of smoothing methods is to smooth

• A)the irregular component.
• B)wide seasonal variations.
• C)significant trend effects.
• D)long range forecasts.

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Definitions:

Accounts Payable Period

The time it takes for a company to pay off its suppliers after a purchase is made, typically measured in days.

Liberal Accounts Receivable Policy

A policy that involves offering lenient credit terms to customers, such as extended periods before payment is due, which can encourage sales but may increase the risk of bad debts.

Operating Cycle

The period it takes for a business to buy inventory, sell products, and collect cash from sales, reflecting the efficiency of a company’s operations.

Inventory Period

The average number of days that a company holds its inventory before selling it, indicating the efficiency of its inventory management.