It Would Be Most Appropriate to Combine a Judgment Approach

question 45

Multiple Choice

It would be most appropriate to combine a judgment approach to forecasting with a quantitative approach by:

• A) having a group of experts examine each historical data point to determine whether it should be included in the model.
• B) combining opinions about the quantitative models to form one forecasting approach.
• C) adjusting a forecast up or down to compensate for specific events not included in the quantitative technique.
• D) developing a trend model to predict the outcomes of judgmental techniques in order to avoid the cost of employing the experts.

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Definitions:

Long Run

A time frame where all production elements and expenses can change, enabling companies to modify all resources.

Optimum Efficiency

The most favorable condition where resources are used in the best possible way to achieve maximum productivity and economic benefits.

Perfect Competitor

An individual or company within a perfectly competitive market that cannot influence the market price and must accept the prevailing market price.

Long Run

In economics, a period in which all inputs and outputs can be varied, allowing for the adjustment of all factors of production.