-The Forecasting Error Measurement That Eliminates the Measurement Scale Factor

question 37

Multiple Choice

$\begin{array}{|l|l|l|l|}\hline\text { Month } & \text { Sales } & \text { Absolute Error, Forecast 1 } & \text { Absolute Error, Forecast 2 } \\\hline \text { Jan } & 35 & 5 & 2 \\\hline \text { Feb } & 29 & 1 & 3 \\\hline \text { Mar } & 39 & 4 & 4 \\\hline \text { Apr } & 42 & 2 & 3 \\\hline \text { May } & 51 & 3 & 1 \\\hline \text { Jun } & 56 & 1 & 4 \\\hline\end{array}$
-The forecasting error measurement that eliminates the measurement scale factor is the _____.

• A) mean square error (MSE)
• B) mean absolute deviation (MAD)
• C) root mean square error (RMSE)
• D) mean absolute percentage error(MAPE)

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Definitions:

Total Amounts

The full quantities or sums reached by counting, calculating, or combining all parts.

Variable Costs Per Unit

Costs that vary directly with the level of production or volume of goods produced, altering according to the amount produced.

Production Increases

Refers to a rise in the quantity of goods and services produced by a company or economy over a certain period.

Break-even Point

The level of production or sales at which total revenues equal total costs, resulting in no net loss or gain.