Table 8.1
The management of an insurance company monitors the number of mistakes made by telephone service representatives for a company they have subcontracted with. The number of mistakes for the past several months appears in this table along with forecasts for errors made with three different forecasting techniques. The column labeled Exponential was created using exponential smoothing with an alpha of 0.30. The column labeled MA is forecast using a moving average of three periods. The column labeled WMA uses a 3-month weighted moving average with weights of 0.65, 0.25, and 0.10 for the most-to-least recent months.

-Using Table 8.1, what is the CFE for months 6-10 for the exponential smoothing technique?
A) less than or equal to 120
B) greater than 120 but less than or equal to 123
C) greater than 123 but less than or equal to 126
D) greater than 126

Question

Table 8.1
The management of an insurance company monitors the number of mistakes made by telephone service representatives for a company they have subcontracted with. The number of mistakes for the past several months appears in this table along with forecasts for errors made with three different forecasting techniques. The column labeled Exponential was created using exponential smoothing with an alpha of 0.30. The column labeled MA is forecast using a moving average of three periods. The column labeled WMA uses a 3-month weighted moving average with weights of 0.65, 0.25, and 0.10 for the most-to-least recent months.
 
-Using Table 8.1, what is the CFE for months 6-10 for the exponential smoothing technique?
A) less than or equal to 120 
B) greater than 120 but less than or equal to 123 
C) greater than 123 but less than or equal to 126 
D) greater than 126

Quizplus · Accepted Answer

The Cumulative Forecast Error (CFE) for months 6-10 using the exponential smoothing technique falls within the range greater than 120 but less than or equal to 123. This is determined by calculating the cumulative sum of the forecast errors over the specified months, which is a common method for assessing the accuracy of forecasting techniques like exponential smoothing.

Table 8.1 the Management of an Insurance Company Monitors the Number of Number