ENTREPRENEURIAL OPERATIONS
SUPPLY CHAIN MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It should be done once a year
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It is better to under-forecast rather than over-forecast
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It should be conducted by the supply chain leadership
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It is more accurate for groups than for individual items
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Detailed explanation-1: -Of the four choices (simple moving average, weighted moving average, exponential smoothing, and single regression analysis), the weighted moving average is the most accurate, since specific weights can be placed in accordance with their importance.
Detailed explanation-2: -Forecasting in the aggregate is more accurate than forecasting individual items. This means that a company will be able to forecast total demand over its entire spectrum of products more accurately than it will be able to forecast individual stock-keeping units (SKUs).
Detailed explanation-3: -Answer and Explanation: The technique of mean absolute percent error (MAPE) is used to determine the accuracy of forecasts by measuring the mean deviation of the forecasted value to the true value in percentage form.