Which one of the following statements is TRUE?
A)The ideal of zero bias and zero MAD can be accomplished by systematically searching for the best values of the smoothing constants.
B)Bias is always less than MAD.
C)For projections of more stable demand patterns without trends,seasonal influences,or cyclical influences,use larger values of n in the simple moving-average approach.
D)One disadvantage of a weighted moving average forecast is that it does not allow you to emphasize recent demand over earlier demand.

Question

Quizplus · Accepted Answer

For more stable demand patterns without trends, seasonal influences, or cyclical influences, using larger values of n in the simple moving-average approach is appropriate because it would provide a smoother forecast that would better capture the underlying demand pattern. Option A is incorrect because the ideal of zero bias and zero MAD cannot be achieved simultaneously, and finding the best values of smoothing constants may help mitigate these errors, but it cannot eliminate them completely. Option B is incorrect because bias and MAD are independent measures of forecast accuracy and cannot be compared. Option D is incorrect because weighted moving averages allow us to assign more importance to recent demand over earlier demand.

Which One of the Following Statements Is TRUE