Where there is a strong trend in sales:
A) a trend adjusted forecast will give lower forecasting errors.
B) naïve forecasting methods show surprising accuracy.
C) percentage rate of change methods prove superior to trend forecast methods.
D) two of the above, and they are a and c.
E) two of the above, and they are b and c.

Question

Quizplus · Accepted Answer

When there is a strong trend in sales, a trend adjusted forecast, which takes into account the trend in the data, will give lower forecasting errors compared to less sophisticated forecasting methods such as naive or percentage rate of change methods. Therefore, option A is the best choice. Option B is incorrect, as naive forecasting methods are unlikely to be accurate when there is a strong trend. Option C is partially correct, as percentage rate of change methods may be useful in some situations, but trend forecast methods generally offer more accuracy. Option D and E are incorrect, as neither option includes the correct answer.

Where There Is a Strong Trend in Sales