Random variation is caused by chance events after all other components of demand have been accounted for in the forecast.

Question

Quizplus · Accepted Answer

Random variation is unpredictable and caused by chance events that are not related to any known factors or patterns. It is often referred to as "noise" or "residuals" in statistical models, and cannot be explained or accounted for by the forecasted variables. This means that it is independent of any other factors or trends in the data, and is likely to occur randomly over time. Therefore, it is true that random variation is caused by chance events after all other components of demand have been accounted for in the forecast.

Random Variation Is Caused by Chance Events After All Other