The coefficient of variation measures
A)the accuracy of the demand forecast.
B)the size of the uncertainty relative to demand.
C)the relevance of cycle inventory to demand.
D)the relative certainty of the forecast.

Question

Quizplus · Accepted Answer

The coefficient of variation is a ratio that expresses the size of the uncertainty in a measurement as a percentage of the measurement itself, indicating the relative size of the variability in comparison to the mean. It is commonly used to measure the variability or volatility of demand, making option B the correct choice. The other options are not directly related to the coefficient of variation.

The Coefficient of Variation Measures