Observed demand (O) = ____________________+______________________.
A)Aggregated; random.
B)Systematic; random.
C)Aggregated; constant.
D)Constant; systematic.

Question

Quizplus · Accepted Answer

In time series methods, when a company attempts to forecast demand based on history, then the historical demand, growth patterns, and any seasonal patterns will influence the forecast. With this method there is always a random element that cannot be explained by historical demand patterns. Therefore any observed demand can be broken down into a Systematic (S) and Random (R) component, i.e. O=S + R.

Observed Demand (O) = ____________________+______________________

Observed Demand (O) = +__