Exhibit 18

question 92

Multiple Choice

Exhibit 18.1.The past monthly demands are shown below.The naïve method,that is,the one-period moving average method,is applied to make forecasts. Refer to Exhibit 18.1.What is the mean square error (MSE) of the forecasts?

• A)-1.67
• B)275.00
• C)91.67
• D)8.33

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Definitions:

Allowance Method

An accounting technique used to account for bad debts by estimating and recording uncollectible accounts receivable.

Outstanding Receivables

The total amount of money owed to a company by its customers for goods or services delivered but not yet paid for.

Allowance for Doubtful Accounts

A reserve for accounts receivable that may not be collectable, reducing the book value of accounts receivable to a more realistic value.

Cash Loan

A financial agreement where a borrower receives a specific amount of cash from a lender and commits to repaying it over time, along with interest.