ENTREPRENEURIAL OPERATIONS
SUPPLY CHAIN MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What is the definition of the “causal forecasting methods”?
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It use historical demand to make a forecast. They are based on the assumption that past demand history is a good indicator of future demand.
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It assume that the demand forecast is highly correlated with certain factors in environment (the state of the economy, interest rates, etc.)
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It imitate the consumer choices that give rise to demand to arrive at a forecast.
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They are primarily subjective and rely on human judgment.
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Explanation:
Detailed explanation-1: -Causal: Causal forecasting methods assume that the demand forecast is highly cor related with certain factors in the environment (the state of the economy, interest rates, etc.).
Detailed explanation-2: -This method is based on the past demands of the product and tries to project the past into the future. The economic indicators are used to predict the future trends of the business. Based on future trends, the demand for the product is forecasted. An index of economic indicators is formed.
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