Chapter 4, Problem 1DQ

Summary Introduction

Interpretation:Finding the reasons for choosing of first technique rather than others for future if one forecasting technique is more accurate than another technique when applied to past data.

Concept Introduction:Forecasting refers to future event anticipation process and forecast can be done by numerous methods depending upon past performance of the entity which is in similar operation. There by forecast is result of calculation made with available information of the operation.

Explanation of Solution

Result of past accuracy forecasting techniques are the main causes in preferred forecasting techniques by the organization and new techniques are preferred for enhanced accuracywhen there are changes in variables of forecasting.

Forecasting is a comprehensive process of evaluating future awkward situation of unpredictable future as it will be up to an extent. They are used in anticipating the future situation of the organization. Generally accuracy of forecasting technique depends upon correctness of such technique in the past.

It leads easy forecasting by analysts but not necessary as new techniques are preferred for enhanced accuracy. It greatly impacts when there are changes in variables of forecasting.

This changes variables leads to changes in forecasting techniques for an entity. So, based upon result of past accuracy forecasting techniques are the main causes in preferred forecasting techniques by the organization.