A monthly forecast based on average monthly sales as compared to monthly forecast produced using daily sales data will have
A) more variation
B) less variation
C) about the same variation
D) cannot tell
E) none of the above

Question

Quizplus · Accepted Answer

A monthly forecast based on average monthly sales typically smooths out the daily fluctuations seen in the sales data. Therefore, it tends to have less variation compared to a forecast produced using daily sales data, which reflects every single fluctuation.

A Monthly Forecast Based on Average Monthly Sales as Compared