Forecasts based on averages generally have what relation to actual demand?
A)The forecast mirrors demand.
B)The forecast leads demand.
C)The forecast lags demand.
D)The forecast exaggerates forecast error.
E)The forecast exaggerates variation.

Question

Quizplus · Accepted Answer

Forecasts based on averages typically lag behind actual demand because they do not capture the fluctuations in demand that occur over time. As a result, they can lead to stockouts or excess inventory if not adjusted in a timely manner.

Forecasts Based on Averages Generally Have What Relation to Actual