Which one of the following statements about forecasting is FALSE?
A) The method for incorporating a trend in an exponentially smoothed forecast requires the estimation of three smoothing constants: one for the mean, one for the trend, and one for the error.
B) The cumulative sum of forecast errors (CFE) is useful in measuring the bias in a forecast.
C) The standard deviation and the mean absolute deviation measure the dispersion of forecast errors.
D) A tracking signal is a measure that indicates whether a method of forecasting has any built-in biases over a period of time.

Question

Quizplus · Accepted Answer

The method for incorporating a trend in an exponentially smoothed forecast requires the estimation of two smoothing constants: one for the mean and one for the trend. There is no need for a smoothing constant for the error, as it is implicitly included in the method.

Which One of the Following Statements About Forecasting Is FALSE