If actual demand for a product is highly influenced by only random variation, the quantitative technique to use for forecasting demand is
A)Regression
B)Moving average
C)Mean Absolute Percentage Error (MAPE)
D)Delphi

Question

Quizplus · Accepted Answer

When actual demand is highly influenced by only random variation, moving average is the best choice for forecasting demand. Moving average smooths out the effects of random variation and reveals underlying trends or patterns. Regression is better suited when there is a clear cause-and-effect relationship between the independent and dependent variables. MAPE is a measure of forecast accuracy, not a forecasting technique. Delphi is a qualitative forecasting technique that requires expert opinions.

If Actual Demand for a Product Is Highly Influenced by Only