Table 8.7
A sales manager wants to forecast monthly sales of the machines the company makes using the following monthly sales data.

-A forecaster that uses a holdout set approach as a final test for forecast accuracy typically uses:
A) the entire data set available to develop the forecast.
B) the older observations in the data set to develop the forecast and more recent to check accuracy.
C) the newer observations in the data set to develop the forecast and older observations to check accuracy.
D) every other observation to develop the forecast and the remaining observations to check the accuracy.

Question

Table 8.7
A sales manager wants to forecast monthly sales of the machines the company makes using the following monthly sales data.
 
-A forecaster that uses a holdout set approach as a final test for forecast accuracy typically uses:
A) the entire data set available to develop the forecast. 
B) the older observations in the data set to develop the forecast and more recent to check accuracy. 
C) the newer observations in the data set to develop the forecast and older observations to check accuracy. 
D) every other observation to develop the forecast and the remaining observations to check the accuracy.

Quizplus · Accepted Answer

The holdout set approach involves using the older observations in the data set to develop the forecast model and then using the more recent observations to test the accuracy of the forecast. This method helps in evaluating how well the model predicts new, unseen data.

Table 8.7 a Sales Manager Wants to Forecast Monthly Sales of the of the Machines