Exhibit 18

question 25

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.If May's demand appears to be 35,what is the residual (error) for May?

• A)35
• B)0
• C)68.75
• D)6.25

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Definitions:

Marginal Benefit

The surplus happiness or utility experienced from using an extra unit of any good or service.

Public Good

A public good is a good that is non-excludable and non-rivalrous, meaning it can be used by everyone freely without depleting its availability to others.

Nonrivalry

A characteristic of certain goods where the consumption by one individual does not reduce availability to others, often seen in digital or public goods.

Nonexcludability

A characteristic of certain goods where it is difficult or impossible to prevent someone from using the good once it has been provided.