20. A forecast is used to A)Determine future sales and revenue B)Determine the p

Question

20. A forecast is used to

          A)Determine future sales and revenue

          B)Determine the physical size of the plant

          C) Helpplan for the hiring of personnel

          D) Noneof the above

21. Which of the following is not one of the basicquestions that forecast must answer?

          A) Howmuch time do I have to develop the forecast?

          B) Howrelevant and what is the availability of historical data?

          C) Howmuch profit will the firm be able to make?

22. Which of the following Statements about forecasting isfalse?

          A) Thelonger the time horizon, the more accurate the forecast willbe.

          B) Thereis an inverse relationship between forecast accuracy and time

          C)Product life cycle influences the length of the forecast

          D) T heforecasting horizon should be at least as long as your strategicplan

Explanation / Answer

In question 22, the answer is A. The longer your time horizon, themore likely the forecast will have inaccuracies. Forecastinginvolves estimates, so if you are forecasting years out, theguesswork and assumptions become less reliable.

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