To reduce subjectivity in the budgeting process and gather as much information as possible,management often enters past sales data into which of the following regression models to obtain a statistical estimate of factors affecting sales?
A)econometric model.
B)input-output model.
C)Delphi model
D)none of the above.

Question

Quizplus · Accepted Answer

Econometric models are designed to estimate the statistical relationships between different variables, such as past sales data and various factors that could impact sales (such as market conditions, advertising, pricing, etc.). By entering past sales data into an econometric model, management can obtain a more objective and data-driven estimate of what factors are most likely to impact sales in the future, which can inform the budgeting process. The other models listed (input-output and Delphi models) are not designed to estimate such relationships and may be less useful for this purpose.

To Reduce Subjectivity in the Budgeting Process and Gather as Much