1. Why is an understanding of internal operating conditions and external environ

Question

1. Why is an understanding of internal operating conditions and external environmental factors so important to consider when choosing and using quantitative methods? Provide an example where past performance is not always a good predictor of future short range results.


2. Can a time series model be helpful to a store manager or owner to plan for next week or next month? If so, what kinds of important business variables might/he or she plan? Sales is certainly one thing. What else? Consider labor or labor hours or materials or purchasing, or you name it. Got example?

Explanation / Answer

1. THe quantative methods are designed around certain parameters which help us to assertain the optimum capability of the method. Interna operating conditions and external environment are the parameters of the quantitative method.

So knowledge and understanding about these parameters is really important.As that will help us in optimization of the results from the method.

The stock exchange is one such example where the past performance might not be a good predictor of short future goals. As stock market is highly volatile and it keeps changing every other minute.

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