Asked by Raeanne Prather on May 07, 2024
Verified
A six-month moving average forecast is generally better than a three-month moving average forecast if demand
A) is rather stable.
B) has been changing due to recent promotional efforts.
C) follows a downward trend.
D) exceeds one million units per year.
E) follows an upward trend.
Promotional Efforts
Activities and campaigns designed to increase awareness or sales of a product or service, typically involving advertising and marketing tactics.
Six-month Moving Average
A method of smoothing data by calculating the average of six consecutive months' worth of data, continuously updated month by month.
- Acknowledge the properties and applicability of time-series analysis in forecasting situations.
Verified Answer
ST
Simone TamboriniMay 10, 2024
Final Answer :
A
Explanation :
A six-month moving average is better suited for stable demand patterns, as it allows for a smoother trend line and reduces the impact of seasonal or short-term fluctuations. A three-month moving average may be more appropriate for demand that has recently changed due to promotional efforts or shows an upward or downward trend, but overall, the six-month moving average is generally a safer choice. The level of demand (such as exceeding one million units per year) does not necessarily affect the choice between three- and six-month moving averages.
Learning Objectives
- Acknowledge the properties and applicability of time-series analysis in forecasting situations.
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